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Timber Sale Tax

Hey guys, quick question - How much tax do you typically have to pay in wisconsin on income from your timber harvest?

Thanks!

Federal income tax rate on timber is a maximum of 15%, however if you have been managing your timber as a business you normally will show a loss or very little after the timber sale so you won't have any. Any profit would be taxed the same as any other on your state income taxes.

ACU, if you want a good CPA that understands the tax implications, I can get you that. In the end, keep meticulous records.

I believe it's treated as long term capital gain. I'm not a cpa just play one at home at tax time.

It's treated as 1099 income. Specifically 1099-T.

Depends. If you set up your timber basis when you bought the land then a timber sale is a return of principle, tax deferred until you sell the property If not it is a long term capital gain.

What Glunker means is you do not pay any tax on the value of the timber at the time when you bought the property. Just tax on the difference from that and what you got out of the sale. My sale was mature Oaks when I bought it and sold about 10 years later due to storm damage so I had very little tax.

Not really. I think I properly stated the how it works. It is either a return of principle or a capital gain.

The first page at the link says pretty much what I said. Then the next pages make it a lot more complicated which is probably what Glunker is talking about. Plus if someone buys land just because they want it with no thought to harvest any timber they won't have a clue to do anything up front.

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