How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Anne Your Own Question
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2421
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Type Your Tax Question Here...
Anne is online now
A new question is answered every 9 seconds

I am harvesting the timber on my farm land ----- what federal

Resolved Question:

I am harvesting the timber on my farm land ----- what federal taxes will be owed
Submitted: 6 years ago.
Category: Tax
Expert:  Anne replied 6 years ago.
Chat Conversation Started
Anne :


Expert:  Anne replied 6 years ago.

Thank you for using justanswer. If you held the timber primarily for sale to customers, or if you are cutting the timber yourself and selling it as firewood,or pulp wood, then this is ordinary business or loss included in your Form 1040 Schedule F.

If you are selling standing timber that was NOT held for sale to customers, then this is a capital asset, and the sale is reported on Form 1040 Schedule D. You would only need to pay tax on the difference between your cost into the tree (which may very well be $0 if you didn't plant them, grade the land for them, etc. but I wanted to mention that if you have a cost associated with the timber, you will want to use that to lower your tax liability)

Please see below for more in depth information (especially page 53)

2009 Publication 225" border="0" alt="PDF" title="PDF"/>Farmer's Tax Guide

I hope this helps

Anne and 2 other Tax Specialists are ready to help you