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I have a partnership that rents land to a campground. They cleared land by cutting and selling timber. How is this income reported & on which returns?

dmtaxxman
Level 1
 
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IRonMaN
Level 15

On the 1065.  Does the partnership only rent land or does it have other activities?

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IRonMaN
Level 15

On the 1065.  Does the partnership only rent land or does it have other activities?

ACME Taxes, Tatoos, Tires and Turtles (I've expanded my line of products to better serve you)

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dd4vols
Level 9

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. 

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sjrcpa
Level 15
and what will they use for basis? Except for timber grower businesses, hardly any one has the basis for timber on their land.

ex-AllStar
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garman22
Level 12
Level 12
I had one who hired an appraiser. Plus all the costs leading up to the sale.
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dd4vols
Level 9
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..
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