Plaintiffs claim that certain timber and timber-lands which they sold in April and May, 1965, were entitled to capital gains treatment under the Oregon taxing statutes. At the time of the sale ORS 316.408 *135was in effect and defined capital assets as “property held by the taxpayer (whether or not connected with Ms trade or business)” but excluded:

“(1) Stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the tax year, or property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.

“(2) Property, used in his trade or business, of a character which is subject to the allowance for depreciation provided in OES 316.335, or real property used in his trade or business. # (Emphasis supplied.)

The Tax Court held that the timber and timber-lands were not entitled to capital gains treatment for the reason they were “real property used in [plaintiffs’] trade or business.” Gould v. Dept. of Revenue, 4 OTR 604 (1971).

We reach the same conclusion and adopt the Tax Court’s opinion.

Affirmed.