Capital Gains Determination
Based on your responses you sold timber in the form of "cut products", but did not "treat the cutting as a sale", under the provisions of Section 631(a).
Income from the sale of timber in a form other than stumpage is ordinary income unless you qualify and elect to treat the cutting as a sale under the provisions of Section 631(a) of the Code.
The income from selling the products produced from the timber must be reported as ordinary income on your business tax return. For a complete discussion on the sale of timber products other than standing timber click here.