MISSISSIPPI STATE -- The tornadoes that swept across Mississippi April 6 caused an estimated $10.3 million in timber damage, and affected landowners must find a way to handle the loss of this cash crop.

According to information released by the Mississippi Forestry Commission, Pike and Walthall counties received the most damage. A tornado left a half-mile wide by 25-mile long path through 4,000 acres in the two counties, causing timber losses of $9.3 million.

Smith, Rankin, Leake, Newton, Lincoln and Lawrence counties also experienced timber losses from tornadoes that day. Smith County had $838,000 in timber damage and Rankin County saw losses of $100,000, according to the Mississippi Forestry Commission.

Debbie Gaddis, forest taxation specialist with the Mississippi State University Extension Service, said landowners can take tax deductions for timber losses. Landowners are compensated for timber losses at tax time either by deductions or reductions to gross income on the tax return.

"A casualty loss is caused by a sudden, unexpected and unusual event from natural or other external forces. It is not a gradual or progressive loss, such as death caused by periods of low rainfall or natural competition," Gaddis said. "The tornado damage from early April is an example of casualty loss."

Timber loss is limited to the loss in fair market value or the basis in the property, whichever is lower. The timber basis is its investment value.

"When you acquire timber or land, it has an initial basis, which varies according to how you acquired it," Gaddis said. "As you invest in the property, the basis is increased. The basis is recovered through deducting it from timber sale proceeds to determine the net taxable gain or by claiming it as a loss deduction according to IRS rules."

For many people, the timber basis is zero. Examples include those who have owned their timber for many years, have harvested all the timber in the past or who received family property as a gift. Inherited timberland and purchased timberland are more likely to have a timber basis. While the best time to determine the timber basis is when the timber or land is acquired, a good forestry consultant can help determine a retroactive timber basis.

"You will not be able to deduct a loss on your tax return if you do not have a basis," Gaddis said.

The law requires those with damaged timber to try to salvage it, and proceeds from the salvaged timber will reduce the amount of loss a landowner can claim. If the proceeds are reinvested into qualified replacement property such as timber, timberland or reforestation costs, the landowner can avoid paying taxes on the gain.

Timber tax laws, reforestation tax provisions, basis calculations and more are complicated, and numerous sources of information deal with this subject. Consulting foresters and Extension Service agents can help a landowner gather the information they need.