Growing timber that is leveled by a natural disaster may be sold in its normal market.If it is replaced, the gain can be deferred if it is replaced by property that is similar or related in use.

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According to the Internal Revenue Service (IRS) guidelines, if timber that has been leveled by a natural disaster is replaced by property that is similar or related in use, the gain from selling the timber can be deferred. The replacement property must be purchased during the replacement period, which is four years for casualty losses due to a natural disaster. The gain can be deferred until the replacement property is sold or disposed of.

Growing Timber That Is Leveled by a Natural Disaster May