So @dkh  if the same client sold the land for a profit you would use a basis of $ 0, because they never expected to sell it ? Occasional sale of timber is sale of investment if kept longer than 1 year as a capital gain. It is considered an investment. While not easy it is possible to figure basis, and if the amount is large enough you should contact a professional. A place to start is: www.timbertax.org