I have a farm LLC that sold logs from a farm that it owns. I was told the income is considered capital gains. Is this true, and if it is, where do I enter the income?

[Cattlerancher]

https://www.irs.gov/pub/irs-pdf/p225.pdf, see page 52

Election to treat cutting as a sale or exchange. Under the general rule, the cutting of timber results in no gain or loss. It is not until a sale or exchange occurs that gain or loss is realized. But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Any later sale results in ordinary business income or loss. See the example below. To elect this treatment, you must: 1. Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and 2. Cut the timber for sale or use in your trade or business.