Ok Thanks. The reason I was inquiring about pre and post LLC ownership is there are some complex rules regarding contribution of property. Based on your response, it appears that these do not apply so I will not address these.
Since you indicate that this is an active agricultural farm and the sales of timber are not a part of the farming activity and they only occur every 10-20 years, I believe that you have a solid position to claim the sale of timber is a sale of a capital asset; capital gain.
This means that the sale is reported on form 8949 and then this would be transferred to form 1065 sch K and K-1 on the applicable line.
The holding period of property contributed by a member includes the holding period of the contributing member. So based on your facts, if the property owners of the farm planted the trees in 2003, contributed the farm to the LLC in 2016, the LLC would take an acquisition date of 2003.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
