Save $$$ - Heat with Wood

[DMax82]

Enlighten us all.

Taxes have no bearing.

You can choose to burn wood that has $160 cash value
Or you can choose to buy $160 worth of heat in the form of electric, propane, nat gas, etc.

Just how do taxes come into play?

In my case, I can choose to burn $160 worth of wood and in doing so, that pumps 12 Million BTU's of heat into my house
Or I can sell that same wood for $160 cash, hand that to my electric company, and in turn they sell me 1333 Kwh of electric. And that 1333 Kwh of power will run my geothermal long enough to put about 16-18 Million BTU's of heat in my house.

So where do taxes factor into that equation? You are trying to over-complicate things in hopes that the facts will get lost in the BS.

Some people like the heat....great. Some people are already established with a wood burning setup and cannot justify the large up-front cost to convert.....great. Some people just like being self sufficient and not depend on power or some other utility.....great. All good reasons to burn wood. But trying to justify it as a cost savings because of taxes.....100% pure BS

Let's say I cut a cord of firewood with a value of $160. Option 1 - burn it myself. If I do this I am getting the full $160 benefit. Option 2 - sell it for $160 and buy the heat of my choice (propane, electric, coal, whatever...). In this case I pay taxes on the $160, then buy fuel with whatever is left. So if the tax man takes $25 then I can only buy $135 worth of propane.

My reasons for burning wood aren't economic though. About to buy a fancy wood insert for the farmhouse I'm remodeling. Gas logs wood be a lot cheaper but the wife and I both love burning wood. I also like cutting it and have a lot of trees to clean up on the property.

 

[LD1]

Let's say I cut a cord of firewood with a value of $160. Option 1 - burn it myself. If I do this I am getting the full $160 benefit. Option 2 - sell it for $160 and buy the heat of my choice (propane, electric, coal, whatever...). In this case I pay taxes on the $160, then buy fuel with whatever is left. So if the tax man takes $25 then I can only buy $135 worth of propane.

My reasons for burning wood aren't economic though. About to buy a fancy wood insert for the farmhouse I'm remodeling. Gas logs wood be a lot cheaper but the wife and I both love burning wood. I also like cutting it and have a lot of trees to clean up on the property.

Don't understand why you would only get $135 worth of propane?

Why are you even figuring it like that.

Figure how heat you can buy with $160. Period. Nothing more. And see how that compares to wood.

The dollar amount is irrelevant.

The point is....you can get X amount of heat out of a given amount of wood.

You could also sell that X amount of wood for Y dollars.

How much heat can you buy with Y dollars and how does it compare?

With my geothermal, and current wood price of $160, I be an get more heat, dollar for dollar, than with wood

 

[ovrszd]

He's showing the taxable income of selling the wood. You clearly stated that you fail to report the income to IRS.

 

[Oldpath05]

I work at the IRS and I'm taking notes.............

 

[LD1]

No one has to pay income tax on selling wood if you are smart.

When you burn wood for your consumption, there are no write-offs.

When you sell it, bars, chains, saw gas, saws, splitter, truck expenses, etc etc etc all become write-offs. It balances out the income and the need change is zero.

Oldpath05.....take all the notes you want. I do indeed claim the income. If I did not, I'd be paying MORE to the IRS. I write off Kubota expenses, new dump trailer, saw stuff, etc. All rolled into my mowing business.

Never known it's to come after someone for selling 10 cord of firewood a year, and never know anyone to claim the income. That's all I'm saying. So forget the taxes. Not relevant to the discussion at hand for 90% of us.

 

[TnAndy]

I said nothing about selling wood, nor whether anyone pays taxes on the sale.

What I said was when BUYING anything you can produce yourself, you have to factor in the cost of taxes on the equation. As I said, I have to factor in about 35% federal taxes + sales tax if I buy fuels. That makes my home produced, and used, fuel, or food, or whatever, significantly less expensive.

You can believe it or not.....

 

[Deere Dude]

I said nothing about selling wood, nor whether anyone pays taxes on the sale.

What I said was when BUYING anything you can produce yourself, you have to factor in the cost of taxes on the equation. As I said, I have to factor in about 35% federal taxes + sales tax if I buy fuels. That makes my home produced, and used, fuel, or food, or whatever, significantly less expensive.

You can believe it or not.....

I'm a believer. Anything you buy, be it lumber, cigarettes dinner out, or wood comes in after you pay taxes on your income. That is why there are so many DIYers.

 

[LD1]

I said nothing about selling wood, nor whether anyone pays taxes on the sale.

What I said was when BUYING anything you can produce yourself, you have to factor in the cost of taxes on the equation. As I said, I have to factor in about 35% federal taxes + sales tax if I buy fuels. That makes my home produced, and used, fuel, or food, or whatever, significantly less expensive.

You can believe it or not.....

Then what's your beef with me?

I can sell wood for $160 cold hard cash.

I know how much heat I can buy for that $160 cold hard cash, and it Trump's the heat I can get from wood.

Taxes have absolutely nothing to do with anything I have said.

 

[DMax82]

Then what's your beef with me?

I can sell wood for $160 cold hard cash.

I know how much heat I can buy for that $160 cold hard cash, and it Trump's the heat I can get from wood.

Taxes have absolutely nothing to do with anything I have said.

That $160 is INCOME, and the government takes a percentage of it from people who give an honest accounting. So you would not have the full $160 to spend on other fuels after Uncle Sam takes his cut. Whether you actually declare and pay taxes on that income is up to you and your own set of personal ethics. Odds are the government won't ever know, but again, up to you.

 

[jk96]

Don't understand why you would only get $135 worth of propane?

Why are you even figuring it like that.

Figure how heat you can buy with $160. Period. Nothing more. And see how that compares to wood.

The dollar amount is irrelevant.

The point is....you can get X amount of heat out of a given amount of wood.

You could also sell that X amount of wood for Y dollars.

How much heat can you buy with Y dollars and how does it compare?

With my geothermal, and current wood price of $160, I be an get more heat, dollar for dollar, than with wood

LD1 as another homeowner with geo you've gone an ruined it for me. I'm now looking at about 5 cords of wood and feeling guilty about using it instead of selling it. Not really but I never really looked at the wood pile from your prospective, just as free heat. I still plan on burning it though. I've got a 16" stainless flue that runs 32ft high and about 26ft of stonework for the fireplace. It was obviously never put in to "save" us money but simply for our enjoyment. The whole family begs for me to get the fire going during the winter if I haven't already.