You'll use what you paid for the land as your cost basis. Since the IRS considers the sale of timber to be a type of business activity, you'll be reporting depletion (not depreciation) on IRS Form T. https://www.irs.gov/pub/irs-access/ft_accessible.pdf If you've never done this before, then understand it's not simple by any stretch of the imagination. Determining total value of all tember present, separate from what was sold can be complicated. You may find it more beneficial to your wallet to seek professional help. Especially if you state also taxes personal income.
