In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Investment Income
-Stocks, mutual funds, Bonds, Other (Timber is other)
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The sale of timber is considered a capital gain. Cost basis for timber is usually zero. Timber basis is not the cost of the property. If the decedent was carrying a cost basis, for the timber, then you would not have a zero basis, and would be allowed a step up to market value, which would result in no capital gain. For a discussion on Timber Basis, see https://www.extension.purdue.edu/extmedia/FNR/FNR_FAQ_2.pdf
We sold timber off property that was inherited in 2008. We still own the property. Do we need a cost basis for the timber? If so, how would we determine that?
Thanks,
Q. Do we need a cost basis for the timber?
A. No. Cost basis for timber is usually zero. Unless, you know, for a fact, that the decedent was carrying a cost basis, for the timber. In that case, you would not have a zero basis, and would be allowed a step up to market value, which would result in no capital gain.
Timber basis is not the cost of the property. For a discussion on Timber Basis, see