Lump-Sum Timber Sales Now Require Issuance of Information Return Form 1099-S

The Internal Revenue Service has announced the finalization of amendments to the Income Tax Regulations under section 6045(e) of the Internal Revenue Code. These amendments provide that sales or exchanges of standing timber for lump-sum payments are "reportable real estate" transactions under Treas. Reg. § 1.6045-4. The lump sum sales or exchanges should be reported using Form 1099-S, Proceeds from Real Estate Transactions. The amendments apply to sales completed after May 28, 2009.

This change is in addition to the previously-existing requirement for reporting of pay-as-cut timber sales using Form 1099-S. See Announcement 90-129.

The 2009 instructions to Form 1099-S do not reflect this revised requirement.