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Yes, it is taxable income. You can enter it as rental income with minor expenses. The real estate taxes could be prorated based on acreage used by the easement divided by total acreage of the property. Keep in mind this is a temporary easement as you indicated. Rents do not provide any special tax treatment so the tax would be whatever tax bracket your income falls into.
You could also choose to report it as Other Income, where no expenses would be allowed against it. The expense would be limited as indicated above so it's your choice. If you decide to keep Schedule E, you can ignore the Other Income instructions below.
If you decide to report it as Other Income, you would want to delete your Schedule E.
- If you're using TurboTax Online software and need to delete a form, click here.
- If you're using TurboTax Desktop software and need to delete a form, click here.
Other Miscellaneous Income:
- Sign into your TurboTax Online account
- Go to Tax Home (left panel) Wages and Income section
- Scroll to Less Common Income > Select Miscellaneous Income, 1099-A, 1099-C
- Select Other reportable Income > Enter a description (----) and the amount
Y
