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Paying Taxes on Lumber

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From: Craig Jones
I took down several black walnut trees in my yard, milled up the logs and sold several boards. Do I have to pay taxes on the money I made and if so, how do I calculate the tax?

Extension Message
From: Jay Hayek
Extension Specialist, Forestry
Department of Natural Resources and Environmental Sciences
Hi Craig:

Thank you for your excellent question! The sale of standing timber or logs is a financial transaction that has federal, and likely state, tax considerations.

However, the milling of your own logs into lumber for personal use is not taxable. I personally do not consider the "one time" sale of several boards to be considered a wholesale or retail business, but if it does become that way in the future (i.e., business or hobby income) then you would want to contact a tax specialist to figure out the best strategies to account for those future lumber transactions! I suppose you can always report the income yielded from your lumber transaction as "hobby income" on your IRS tax return!

I'm not a tax specialist, nor am I a certified public accountant (CPA), therefore I cannot legally give you tax or accounting advise.

Best of luck!

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