Wood tax

[jcamp38]

Hi. I had my woods logged last may and received about $5500 for the wood. Does anyone know how I claim this on my taxes and about how much I will have to pay? Thanks

 

[nrford]

Capital gain

 

[blades]

yep unless you can reduce it by some sort of active management- ie fuel , equipment that sort of thing.

 

[jcamp38]

How do I find out what percentage it will be taxed at?

 

[nrford]

Google it...most likely I'd say 15% unless your in the top 39% tax bracket.

 

[jackatc1]

When you try to figure your base you will start pulling your hair out
Not saying it's legal, but might I suggest you claim it as regular income.
Ask logger for a 1099.
If you used a forester ask her for advice.
In my opinion any landowner having a timber sale should always hire a forester.

 

[drz1050]

How did you recieve this money? Cash, check, credit card?

Gifts (under a certain limit) aren't taxed

 

[peakbagger]

As usual, see your accountant. Do it under the table at your risk, given the way congress is cutting the IRS budget your odds of being caught are probably a lot worse than before but do you really want it hanging over your head for seven years?

 

[Easy Livin’ 3000]

When you try to figure your base you will start pulling your hair out
Not saying it's legal, but might I suggest you claim it as regular income.
Ask logger for a 1099.
If you used a forester ask her for advice.
In my opinion any landowner having a timber sale should always hire a forester.

Confused by your question of whether claiming it as regular income would be legal? That would have it taxed at taxpayers highest marginal rate.

 

[Easy Livin’ 3000]

Hi. I had my woods logged last may and received about $5500 for the wood. Does anyone know how I claim this on my taxes and about how much I will have to pay? Thanks

Hi Camp- I suggest you look for your tax advice from an accountant, or do your own independent research from a reputable source, based on the range of answers you are getting here.

 

[jackatc1]

After reading the tax code I decided not worth going completely bald instead of
somewhat bald.
Took payments in two different years.

 

[EJP1234]

Lets say it ended up at a lumber wholesaler who bought it from a mill...

The wholesaler 1099'd the mill.

The mill 1099'd the logger.

The logger should have 1099'd you, and if they didnt, you still better believe he showed that as a business expense, and it was claimed...

Capital Gains are not the same as your income tax rate, but are based off of it... The most it can be for long term capital gains is 20% as of 2017...

Id pay it, because if you get caught, its more expensive, and they really look into your books and they will make you pull your hair out, especially if your asking on a forum what to do...

 

[cahaak]

It is not a capital gain. This is more complicated. It is income, but then the value of your land decreased by that amount (basis change). I think I would consult someone in the industry for advice. It is interesting here, but lots of times after a parcel of land is logged off, if it can't be sold, they simply let it go into tax forfeit, with the tacit assumption that all of the value of the land has been take until ~ 20-25 years from now until it grows back up again.

 

[nrford]

It is not a capital gain. This is more complicated. It is income, but then the value of your land decreased by that amount (basis change). I think I would consult someone in the industry for advice. It is interesting here, but lots of times after a parcel of land is logged off, if it can't be sold, they simply let it go into tax forfeit, with the tacit assumption that all of the value of the land has been take until ~ 20-25 years from now until it grows back up again.

But...in order to use the basis change you needed to complete an inventory before the harvest of the total volume/value, if you didn't have this done it simply becomes a capital gain. I have over 25 experience in the sawmill/timber industry...

 

[EJP1234]

It is not a capital gain. This is more complicated. It is income, but then the value of your land decreased by that amount (basis change). I think I would consult someone in the industry for advice. It is interesting here, but lots of times after a parcel of land is logged off, if it can't be sold, they simply let it go into tax forfeit, with the tacit assumption that all of the value of the land has been take until ~ 20-25 years from now until it grows back up again.

https://www.fs.fed.us/spf/coop/library/taxpubfaqs.pdf

Its capital gains....

 

[jcamp38]

I talked to the logger who is a relative of mine. He said I would be receiving a 1099 form and I would have to find out what tax bracket I fall into, which looks like I'm going to pay 15%. I'm going to talk to a accountant just to make sure I'm doing it correctly. Thanks for the feedback.