We purchased property in Vermont in 1993. In 2000 we had a small timber harvest by a logger and received payment of $7,700. At tax time our then tax preparer established our “basis” in the land at $87,500 and found that we had no federal or state tax liability for 2000 from logging.
We again logged in 2005 and 2013 with total payment of $37,500 and again the tax preparer found no tax liability for either year.
We recently had a timber harvest in 2022 and received payment of $47,200 and with this latest amount our total logging payments amount to $92,400 so exceeding the “basis” of $87,500. We assume this will create some tax liability for 2022. Does it?
We plan on having TurboTax prepare our 2022 return.
