Land cannot be depreciated or depleted. These costs are recovered when the land changes title. In essence, they become part of the land. These types of land improvements are considered to have a fixed life and their cost can be recovered through depreciation. Examples include bridges, culverts, fences, temporary roads and fire lanes.
Any undepreciated balance is added to the basis of the land when sold.
Timber Account Establish the cost or basis for the timber in this account to provide a depletion allowance when the timber is harvested. Upon purchase or other acquisition of timber property, you may want to establish several sub-accounts such as merchantable timber, young growth and tree planting. The cost or basis should be established for each of these accounts. It is important to maintain an accurate timber account. For most timber, your recovery of basis will be through depletion.