Paul L. Caron

Sunday, April 23, 2006

Deductions Do Really Grow on Trees

Tree Form N-12, Hawaii Individual Tax Form (Line 33): 

Exceptional trees deduction (attach affidavit)

Hawaii Individual Income Tax Instructions (Page 38):

Line 33 Exceptional Trees Deduction. You may deduct up to $3,000 per exceptional tree for qualified expenditures you made during the taxable year to maintain the tree on your private property. The tree must be designated as an exceptional tree by the local county arborist advisory committee under chapter 58, HRS. Qualified expenditures are those expenses you incurred to maintain the exceptional tree (excluding interest) that are deemed “reasonably necessary” by a certified arborist. No deduction is allowed in more than one taxable year out of every three consecutive taxable years. The deduction is allowed for amounts paid in taxable years beginning after December 31, 2003.

An affidavit signed by a certified arborist stating that the amount of expenditures are deemed reasonably necessary must be attached to your tax return. The affidavit also must include the following information: (1) type of tree, (2) location of tree, and (3) description and amount of expenditures made in 2005 to maintain the tree. The affidavit must be notarized.

(Hat Tip:  Tax Policy Blog.)

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