Sale of Timber

[Donny]

client had one time sale of timer, I use form F to report tHis? is this correct thanks

[wendybooth]

When I had this a few years ago I used Shc D as long term cap gain because bought land yrs ago. Hope this helps!

[DANRVAN]

When I had this a few years ago I used Shc D as long term cap gain because bought land yrs ago. Hope this helps!

Pub 225 discusses putting it on Schedule F in certain situations. It usually goes on Schedule D.

[Super Mom]

I had a client with this last year, and found I was supposed to use Shed. D. I did alot of research on this and found that people often overpay taxes on this because they don't take advantage of the adjusted basis on the original land purchase. There is much good information online such as Ohio State University, etc.... Your local Agricultural Extension is a good place for info too! Good Luck!

[kcjenkins]

It would only go on the Sch F if the client is running a tree farm. If he merely makes a one time or an occasional timber sale, it goes on the D.

[Donny]

It would only go on the Sch F if the client is running a tree farm. If he merely makes a one time or an occasional timber sale, it goes on the D.

advice on figuring cost or basis thanks

[Redneck]

It would only go on the Sch F if the client is running a tree farm. If he merely makes a one time or an occasional timber sale, it goes on the D.

Form T - while not required for an occasional sale, the instructions for this form have some record keeping requirements of which the seller should be aware.

[kcjenkins]

Donny, if the client bought the land and it already had mature or nearly mature trees, some part of the cost should be assigned to the trees, and that would be his basis. If he bought land with just saplings, he would not have any basis in the trees, so all the sale proceeds would be gain, unless he had some expenses to harvest them. If he bought clear land, and later planted the saplings, his basis would be the prep costs and cost of the saplings, which should have been capitalized at the time.

If he bought the land with the trees, he should get an appraisal of the tree value at that time. The County Extension Agent can probably help him there.

[Donny]

Donny, if the client bought the land and it already had mature or nearly mature trees, some part of the cost should be assigned to the trees, and that would be his basis. If he bought land with just saplings, he would not have any basis in the trees, so all the sale proceeds would be gain, unless he had some expenses to harvest them. If he bought clear land, and later planted the saplings, his basis would be the prep costs and cost of the saplings, which should have been capitalized at the time.

If he bought the land with the trees, he should get an appraisal of the tree value at that time. The County Extension Agent can probably help him there.

thanks for the help, greatly appreciated

[Gail in Virginia]

Generally, we only use sch F for this if they cut their own lumber, or at least helped to cut it. If they sold standing timber, and someone else did the cutting, I would report it on Sch D.