Capital Gains Determination
Based on your responses you sold timber in the form of "cut products", you elected to "treat the cutting as a sale", under the provisions of Section 631(a), you owned or had a contract right to cut the timber, but the timber was not "for sale or use in a trade or business".
Income from the sale of timber in a form other than stumpage is ordinary income unless you "elect" and "qualify" to treat the cutting as a sale under the provisions of Section 631(a) of the Code.
Your sale of cut products did not meet the qualifications of Section 631(a), and as such the income from your sale must be reported as ordinary income on Form 1040. For a complete discussion on the sale of timber products other than standing timber click here.