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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?

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Level 1
last updated ‎December 07, 2019 3:39 AM
 
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Level 15
last updated ‎December 07, 2019 3:39 AM

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

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

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Level 15
last updated ‎December 07, 2019 3:39 AM

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

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

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Level 8
last updated ‎December 07, 2019 3:39 AM

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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Level 14
last updated ‎December 07, 2019 3:39 AM
and what will they use for basis? Except for timber grower businesses, hardly any one has the basis for timber on their land.

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Level 11
Level 11
last updated ‎December 07, 2019 3:39 AM
I had one who hired an appraiser. Plus all the costs leading up to the sale.
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Level 8
last updated ‎December 07, 2019 3:39 AM
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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