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user478586983
New Member

Are damages paid to me to build a fence to replace one removed by powerline taxable? If yes, where?

 
2 Replies
MinhT1
Expert Alumni

Are damages paid to me to build a fence to replace one removed by powerline taxable? If yes, where?

In general, if the settlement is not more that the value of your old fence, then it is not taxable.

 

The IRS says:

 

Loss-in-value of property  

 

Property settlements for loss in value of property that are less than the adjusted basis of your property are not taxable and generally do not need to be reported on your tax return. However, you must reduce your basis in the property by the amount of the settlement. 

 

If the property settlement exceeds your adjusted basis in the property, the excess is income. For more information, see the Instructions for Schedule D, (Form 1040) Capital Gains and Losses and the Instructions for Form 4797, Sales of Business Property.

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Opus 17
Level 15

Are damages paid to me to build a fence to replace one removed by powerline taxable? If yes, where?

If you received a 1099, you will need to ask us for how to report it so it is not taxable.

 

 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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