How you report income from logging and how much tax you owe depend on which of 3 tax classes your woodlot falls into. You can determine your woodlot's tax class by answering a few simple questions about why you own it and how you use it.
This excerpt from a longer document by timber tax expert Dr. Linda Wang explains the 3 woodlot tax classes, how to determine which one your land falls into, and the advantages and disadvantages of each.
Also from Dr. Wang, this hour-long webinar covers multiple woodland tax issues. Jump to 4:08 for the section on woodlot tax classes.