Did he cut the timber himself or did he sell standing timber to someone else who cut it? If he cut it himself, I would most likely use a Schedule F, and the basis would be the cost on the Schedule F. Or if he is actually milling the timber before he sells it, I might use a Schedule C but I would still use the basis as the cost of goods sold. If he sells it as standing timber, then I would use a schedule D/8949 to report the sale and the basis. Using basis for the timber results in a reduction of basis on the land generally. It can be pretty complicated. And a lot depends on the facts and circumstances. The IRS farm publication also has some information on timber sales, I believe. Or at least it used to.