Timber Sales by Dairy Farmer

[buelfarm]

HELP !  I thought it would be easy to enter this sale of Timber by my Dairy Farmer ( $12K ) on Sch D, but I don't see a way in the software, since it's not a 1099-B transaction.  Then I thought of Form 4797 Part III, but there's no way to enter that, either !! I definitely don't want to enter on Sch F due to the SE tax, so what should I do? 

[IRonMaN · Accepted solution]

You still use the schedule D worksheet but just check the appropriate box that it wasn’t reported on a 1098B

[BobKamman]

There's a Form T.  I think I did one a long time ago.  This page from TaxAct says they don't support it.  Not sure if ProSeries does.  

https://www.taxact.com/support/21155/2024/form-t-sale-of-timber-but-not-in-timber-business? 

[taxman1955]

I use Form 4797, Part I.

[taxiowa]

Actually there is a 4797 enterable entry form just for purposes like this.  If you enter correctly it will flow to Sch D.  But taxman's method would also work.  Schedule T is used if you established a standing board foot value when you bought land so you can take off cost against this sale.  Since this a small sale I personally would not look into that, but remember next time a client buys farm ground with timber to get a value of standing timber at that time.

[buelfarm]

Thanks!  That was simple ...

[buelfarm]

Yikes --> I didn't think there was still anything I had not heard of ... thanks for letting me know about "T"

[buelfarm]

Some of the reading I did shows that option; however, I have always used Sch D for my farmers who are not in the timber business ...

[buelfarm]

Thanks very much - good overview & good reminder on original value !! 

[George4Tacks]

https://www.timbertax.org/publications/irs/inst/Form1099-Sinstructions.pdf