Current through Register Vol. 61, No. 4, April 1, 2022
(1) For federal tax
purposes, a taxpayer may elect under Section 631(a) of the Internal Revenue
Code to treat the cutting of timber as a sale or exchange of such timber, even
if it remains unsold at the end of the tax year. For Oregon tax purposes, the
gain is not included in income until the actual sale takes place.
(2) The gain from the sale or cutting of
timber that is included as capital gain income for federal tax purposes under
IRC 631(a) does not automatically qualify as capital gain income for Oregon tax
purposes. Gain from the sale or cutting of timber not qualifying as capital
assets under IRC 1221 shall not be used to offset capital losses. However, such
gain may be used as an offset to ordinary losses.
(3) In order to modify federal taxable income
to reverse the effects of IRC Section 631(a), the taxpayer must compare the
amount of Section 631(a) gain in beginning and ending inventory. If the amount
of such gain in ending inventory exceeds the amount in beginning inventory, the
difference is subtracted from federal taxable income. If the amount of Section
631(a) gain in beginning inventory exceeds the amount in ending inventory, the
difference must be added to federal taxable income in arriving at Oregon
Admin. R. 150-317-0430
RD 7-1983, f.
12-20-83, cert. ef. 12-31-83; RD 9-1992, f. 12-29-92, cert. ef. 12-31-92;
Renumbered from 150-317.362,
68-2016, f. 8-15-16, cert. ef.
Publications: Publications referenced are available from the
Stat. Auth.: ORS
Stats. Implemented: ORS