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If you received money from the sale of timber, you'll probably get a Form 1099-S. Sometimes though, it's reported on a Form 1099-MISC.
Regardless of which form you received, timber income is reported in the Investment Income section.
If you received money from the sale of timber, you'll probably get a Form 1099-S. Sometimes though, it's reported on a Form 1099-MISC.
Regardless of which form you received, timber income is reported in the Investment Income section.
@AnnS7 Thank you. This was helpful for our tax situation this year. We received a 1099S for the sale of timber on some land we inherited. I have a follow up question I have not found elsewhere. On the turbo tax screen I need to report the sale proceeds, which aligns with box 2 (gross proceeds) on the 1099S. I do not know what the logger's profit was as it was deducted from the gross proceeds. How do I complete the "Costs or other basis" section in turbotax? Do I need to contact the logger for that information to complete it?
Your cost basis for a timber sale is usually zero. The logger's profit is irrelevant. Timber basis is not the cost of the property. For a discussion on Timber Basis, see https://www.extension.purdue.edu/extmedia/FNR/FNR_FAQ_2.pdf
If the decedent was carrying a timber cost basis (unlikely) and you have those records, your cost basis will "step up" to fair market value on the date of death. In that case, you would likely have no gain or even a capital loss for tax purposes.
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