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Timber Cost Basis

Good morning, 

Happy AFTER TAX Day!!! 

However, still sorting through extensions...... 😉 

I'm trying to find a reasonable way to determine cost basis on a timber sale for property that has been held for decades. Maybe my brain is tired, but it seems like all of the reference articles are just making me more confused lol!!! 

Thank you to anyone available today who might have any insights, 

Dawn 

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Accepted Solutions
IRonMaN
Level 15

Held for decades?  Basis is probably zero since it takes decades for the trees to grow big enough to be harvested.


Slava Ukraini!

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7 Comments 7
IRonMaN
Level 15

Held for decades?  Basis is probably zero since it takes decades for the trees to grow big enough to be harvested.


Slava Ukraini!
dkh
Level 15

I always use $0 as a basis

Good morning, 

So, I did use 0 as the cost basis, and it didn't change the results of the return at all from a 4k timber sale. Is that typical? I just feel like I must be missing something.... 🇲🇶

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IRonMaN
Level 15

Low income so the capital gains rate was zero?


Slava Ukraini!
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taxable income was 60k? 

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IRonMaN
Level 15

If you don't want to take the time to check the ProSeries calculations, Google is still a good friend to have

at what income limit does zero capital gains rate end - Google Search


Slava Ukraini!

Ah, 0% for MFJ up to 89,250? 

Apparently, I don't have many clients with long-term capital gains. But, I'm glad because this couple has paid property taxes all of those years, and I'm sure they are still behind. 

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