Yes, since you received Form 1099-S, this transaction is considered the sale of a right-of-way and is reported as an Investment Sale (see screenshot below -
click to enlarge).
To find this section of TurboTax, use the Search/Find box, type in "investment
sale", hit Enter, then click on "jump
to investment sale." This will take you to the start of the
investment sales section.
In order to record this properly, you have two choices:
1) You may allocate a
portion of the adjusted basis in your property to the area of the
right-of-way. This could be acreage or square footage. This option will reduce
a) the amount of capital gains on the sale and b) the basis of your property
when it is sold in the future.
2) You may report zero
cost-basis for the right-of-way, which will make the entire
proceeds from the sale subject to capital gains tax (generally 15% or 25%,
depending on your tax bracket).
Under either option, the purchase date is the date you
originally purchased the property.
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