Get your taxes done using TurboTax

In TurboTax, reporting a 1099-S for a cell tower buyout is different from your previous 1099-MISC rental reporting. Because you are being paid over 5 years but received a 1099-S for the full amount, you generally have two choices in how to enter it.

Option 1: The Installment Sale (Recommended)

This method allows you to pay taxes only on the money you actually received this year, rather than the full amount on the 1099-S. if you choose this method, you will need to report this in the same manner for five years, starting with this year.

1. Open your return and go to the Federal tab.
2. Go to Wages & Income.
3. Scroll down to the Less Common Income section (you may need to click "Show more").
4. Select Start or Revisit next to Installment Sales.
5. Answer Yes to "Do you want to report an installment sale?"
6. TurboTax will guide you through entering the information:

• Description: "Cell Tower Lease Buyout / Easement."
• Sales Price: The full amount shown on your 1099-S.
• Cost Basis: This is the portion of your land's original cost attributed to the tower area (e.g., if the tower takes up 1% of your acreage, use 1% of what you paid for the land).
• Payments Received: Enter only the amount you were actually paid during the tax year.

Option 2: The "Investment" Sale (Lump Sum)

If you prefer to pay all the taxes now (perhaps if you expect to be in a much higher tax bracket in the future), you can report it as a standard land sale.

1. Go to Wages & Income. 
2. Find Investments and Savings and select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.
3. Select Add Investments.
4. When asked what type of investment, select Other (or "Land").
5. Enter the details from the 1099-S.

Important: TurboTax will ask for your "Cost Basis." If you enter "0", you will be taxed on the entire amount. If you enter a basis (as explained in Option 1), you only pay tax on the profit.