Sale of Timber

[RLymanC]

Reading the instructions on Form T I will not be required to file Form T under the "exceptions" listed under Who Must File.

Would you report net income on 1040 Line 21 (other income) or use Sch. D?

Schedule D would eliminate EIC.

I feel line 21 would be OK. Timber is located on a 10 acre parcel that is taxpayer's main resisence. She is not in the trade or business, the sale of timber is non-business.

Just read Pub 544....appears Sch. D should be used.

[Bees Knees]

All property is considered a capital asset, including personal use property, unless one of the exceptions applies. One of the exceptions is property held for the sale to customers (inventory). If the taxpayer is in the business of selling timber to customers, the timber is not a capital asset and would thus be reported on Schedule F.

However, since you say the taxpayer is not in the business of selling timber to customers, that puts the timber back into the capital asset classification – reportable on Schedule D as the sale of a capital asset.