I received a 1099S for standing timber I sold. How do I deduct the cost of the debris removal which is left by the logger.

[Suntanna]

The logger that purchased the standing timber, left all the branches and stumps.  I had to hire another company to come in and grind and remove which I did within days of the harvest of the timber.  Since I have to report the sale as an investment sale, do I first net the 1099S with the expense or show the 1099S amount in schedule D and put the expense somewhere else in the return?

[IreneS · Accepted solution]

UPDATED FOR TAX YEAR 2019

Report the sale of standing timber, but subtract the costs of the cleanup and any costs of selling, to enter a NET figure.

Report the sale in TurboTax, using these steps:

1. Click on Federal Taxes > Wages & Income [In TT Self-Employed:  Personal > Personal Income > I'll choose what I work on].
2. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  
3. If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
4. If you haven't already entered some investment sales, you will see a screen Did you sell stocks, mutual funds, bonds, or other investments in 2019?  Click the Yes box.
5. On the next screen indicate that you did not receive a 1099-B.
6. Enter a description of the sale on the screen, Tell us more about this sale.
7. On the next screen, enter the sale information.  For Type of Investment select Other.  Be sure to enter the net proceeds.
8. If income taxes were withheld check the box, I have more info to enter that I don’t see here.  
9. A box will appear to enter any federal or state taxes withheld.
10. Continue through the screens, entering the requested information.

[Edited | 4/3/2020 |  12:26pm PDT]