Timber tax experts – a question

[TAXNJ]

QUESTION: would it be treated as ordinary income or Capital Gain or nothing to report

SCENARIO: Land Owner (not farmer) gets $12k for their Standing trees (cut for logs) – cost to land owner is Zero

Personal property woodland (investment), primary use held for personal enjoyment, hunting and fishing

A Logging Company (that buys, sells standing lumber) offers to cut and remove standing trees on land owners property.

The Logging Company pays say $12k to land owner for the standing trees

Standing trees older than 1 year – property owner did not plant them and no costs for growing, etc.

Land owner called the Logging Company and asked if they when and if will they send the form 1099 and a Logging Company rep said it was like selling their “old couch” so no form 1099 issued. But the Logging Company asked for the Land owner’s TIN #!!


Thanks in advance

[TAXNJ]

Poster - lion

LION thanks for the reference - TimberTax.org

You provided it in another post on Timber Sale

Valuable reference

[TAXNJ]

LION sent you a PM

In addition to LION (just sent you a PM), any tax experts on this subject?

One more try

[Gene V]

Try Publication 225 page 53,Timber or page 24 and 46

[TAXNJ]

Yes but

Try Publication 225 page 53,Timber or page 24 and 46

Thanks Gene. This is a crazy area because it is unclear in the IRS code though TimberTax.org covers it somewhat.

the challenge is client not in the business of farming or business of selling trees, crops, etc and therefore do not think the
Form T (would you believe there is such a form) is applicable.

The ultimate challenge is whether this would be a "capital gain" or ordinary income. Some of us are leaning toward a "capital gain"

The individual land owner whose second property happen to have trees that a logging company wanted.

So that is why reaching out to timber experts that handle these type of sales that are not farming/business sale but a one time sale of wood on someone personal property

[Gene V]

I would treat it as long term capital gain, also see Pub. 544
Here is another website on timber sale

http://www.fs.fed.us/spf/coop/library/taxpubfaqs.pdf

[TAXNJ]

Same mindset

I would treat it as long term capital gain, also see Pub. 544
Here is another website on timber sale
http://www.fs.fed.us/spf/coop/library/taxpubfaqs.pdf

Yes, also will get in touch with that organization.

Agree with capital gain (sale of personal use property), also,referenced pub544. This is turning into a unique case because it is not investment property or business. Many of the western universities and Canada are specialists in the area of timber. Incredible amount of USDA forms, etc. when applicable to specific sales in this business area

Thanks again

[Super Mom]

Maybe you could call a liscenced forester?

[TAXNJ]

Thanks

Maybe you could call a liscenced forester?

No, more interested in knowing the tax law. Think that area is more knowledgeable with the forest itself. But think we have found information and thanks to Gene V and Lion (posters)