Yes, a temporary easement is treated as rental income and is reportable on Form 1099-NEC to the owner to be reported on Schedule E. Payments for permanent easement sales are not considered income. Instead, the payment lowers your basis in the property.
Since you received Form 1099-NEC you will have to report the "Rental Income". When you enter the Form 1099-NEC, it will trigger TurboTax to create a Schedule E. Edit this Schedule E (under Rental and Royalty Properties) to complete the property profile. Leave the days rented blank.
To offset the basis adjustment, under Other Expenses, report the amount of basis allocated to the portion of your property covered by the permanent easement. A possible description would be "Reduction in basis for easement."
To determine the allocated basis, use a percentage of the property covered by the easement. For example, if you have a quarter of an acre (10890 sq ft) and the easement covered 109 sq ft, then you gave up 1% of your property. Multiply your basis in the property (land only) by 1%. This is the basis for the easement.
For more information on property easements, see: IRS Publication 544 Easements
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