Capital Gains Determination
The sale of standing timber (stumpage) after December 31, 2004 is subject to a different standard. Timber held "primarily for sale to the customers in the ordinary course of a trade or business" is still not a capital asset under Section 1221 of the Code. It remains Section 1231 property. However, it is no longer necessary to dispose of stumpage with an economic interest retained under Section 631(b) of the Code to qualify for capital gains treatment.
Did you sell or otherwise dispose of standing timber (stumpage) after December 31, 2004?