Enter the 1099 in the place that best represents the type of income received.
If the payment you received was for a permanent right-of-way, Form 1099-NEC would not normally be the correct reporting form. You don't usually report payment for an easement, as income. You only reduce your cost basis in the remaining property, by the amount you received, for when the property is sold in the future.
Contact the payer with any questions about the nature of the payment or why it was reported on For 1099-NEC.
To enter a 1099-MISC for rental income and royalties (Schedule E), go to income from rentals or royalties.
See the discussion in this thread on the topic of rental income for an easement for a wind turbine for more information.
Taxpayers who receive these payments are typically royalty owners who do not have a working interest in extraction operations. Taxpayers should normally report these payments as income on Part I of Schedule E (Form 1040), Supplemental Income and Loss. Income reported on Schedule E is usually not subject to self-employment tax.
Taxpayers who do have a working interest in the operations are subject to self-employment tax and must file Schedule C (Form 1040), Profit or Loss from Business. In that case, reporting the payment on Form 1099-NEC would be appropriate.
See also this IRS webpage for more information.
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