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Is Tree Removal Considered Home Improvement?
Understand that we cannot cover every aspect of the ever changing IRS tax deduction code, or list every deductible expense here when related to tree removal for property owners.
However, there are often state-specific tax breaks and area-specific federal breaks for home improvement deductions. If you happen to have a home that falls under the “working farm” category adds another layer of complexity, but could allow for the possibility of realizing business expenses and itemized deductions.
That said, tree removal is often considered a home improvement if it is part of a larger capital improvement project that adds to the value of your home.
A homeowner may want to remove a tree to:
- Build a patio
- Construct a walkway or a driveway
- Add an outbuilding or garage
We advise that before applying any assumptions of a deductible expense, you consult with your tax advisor to gather the most up-to-date information. Also, speak with your neighbors, they may know of programs in your area for you to investigate.
Additionally, it’s best to investigate these possibilities as soon as you are ready to make changes to your property. This way, these deductions can be taken advantage of as soon as possible.
Is Tree Removal A Tax Deduction?
When a tree itself is causing (or has caused) property damage, tree removal may be considered tax-deductible as a casualty loss deduction, or real property depreciation.
When filing your tax return, keep an itemized list with receipts to submit to your tax professional, and these could result in a tax break.
Some examples worth investigating are:
- Plumbing problems due to tree root interference
- Raised sidewalks, or damage to a driveway by root incursion
- Damage to a home, other real property or fencing
You may also find tree removal a deductible expense when filing your income taxes, due to storm damage. It is possible that even made-made events like having your tree damaged by an errant car— a deductible expense.
One caveat is that it’s important that the damage or depreciation wasn’t apparent when you purchased the home. Again, for detailed information on your unique tax situation, consult with your tax professional.
When Is Tree Removal NOT A Tax Deduction?
If there is no apparent damage to your tree, but you still choose to remove it for whatever reason, the tree removal itself cannot usually be deducted from your federal income tax — depending on current tax law. Please refer to your tax advisor, or a current IRS publication for more thorough explanations.
However, as mentioned above, if the removal is incorporated into a larger, personal use capital investment project (such as home improvements) you may be able to see some advantages on your property taxes, or adjusted gross income.
When Should A Tree Be Removed?
A general rule is that if 50% of your tree is sick, or damaged, it is probably best to remove it.
A tree that is in decline can continue to survive for many years but will always have stunted, limited or abnormal growth and can appear sickly.
If your trees have been damaged by toxic herbicides and are showing a sickly appearance, or misshapen, malformed leaves, it is still possible for them to survive.
Feel free to give us a call to see how we can help save your tree.
Taxpayers that have rental property, or other forms of real estate that suffer the possibility of a deductible casualty loss, should also consult with a qualified tax advisor. That information is outside of the scope of this article.
Should You Hire A Professional Or DIY?
We always recommend consulting and working with a tree service professional when you’re working on a new landscaping design or removing your trees for whatever reason. At the very least, if there are power lines involved, always call your utility service provider first.
Also, a taxpayer might consider consulting with an appraiser regarding the current valuation and fair market value of your home after the work you are curious about undertaking is completed.
The information they have, regarding the work adding to the value of the property could lead to a tax deduction or reimbursement of the capital investment.
The good news is, even if the tree removal isn’t directly deductible from this year’s taxes, removing a tree could lead to deductions and other tax advantages in the following years – especially if you plant new trees.
If you’re unsure about the possible benefits and drawbacks of removing your particular tree, feel free to reach out to us to get a quote. Our tree experts are always willing to help you ensure the health and safety of your family and the trees on your property.
