and the selling of the Timber (unless their primary business is selling timber), would be a Schedule D Capital Gain.... and either short-term or long-term depending on the acquisition date. 

and what will they use for basis? Except for timber grower businesses, hardly any one has the basis for timber on their land.

I had one who hired an appraiser. Plus all the costs leading up to the sale.

Start with original acquisition costs....first step is to determine the allocation at that time of just the land, and just the timber. i.e. what would the land have been worth w/o any timber on it.  I live 15 miles from a paper mill, so I come across this all the time.  after you get the land and timber segregated costs wise, then you determine what % of the timber was sold...and that's your best gest estimate..