Plum Creek Executive Says Audit Activity Increasing for Timber REITs

Paul Stamnes, vice president of tax with Plum Creek Timber Company (NYSE: PCL), joined REIT.com for a video interview at REITWise 2013: NAREIT’s Law, Accounting and Finance Conference in La Quinta, Calif.

Plum Creek is one of the largest land owners in the nation. Stamnes described audit issues surrounding timber REITs.

“In the last couple of years there has been increased activity, in particular looking at transfer pricing,” he said. “The IRS is really starting to focus on REITs, primarily from the taxable entities, because that’s where the tax dollars are.”

Stamnes explained concerns regarding recreational leasing.

“Recreational leasing is somewhat unique to the timber REIT industry, because timber REITs own a lot of land,” he said. “Clubs engaged in hunting or other activities will lease land from timber companies because our land is generally open to the public when we’re not engaging in forestry activities. The critical tax issue is ensuring that income remains qualified for REIT purposes.”