Capital Gains Determination
Based on your responses you sold:
standing timber (stumpage),
the timber was "held primarily for sale to customers in the ordinary course of a trade or business", under a pay-as-cut contract, you retained an economic interest in the timber, the timber was held for more than a year, and payment was based on the actual volume cut.
You have met all the qualifications for a Section 631(b) transaction, ("disposal with an economic interest retained") and as such the income from the sale qualifies for long-term capital gains treatment.
The gain or loss from the disposal with an economic interest retained is reported on Form 4797, Sale of Business Property, along with any other Section 1231 transactions. The gains and losses from Section 1231 transactions are netted and then transferred to your Form 1040, Schedule D.