We've received a payment on 1099-S for an easement for a sidewalk in the front of a property we rent to a business. IRS says the income can be recorded as a reduction in the cost basis of the property and we wish to do that in Turbotax but I don't just want to go in and change the basis in the Asset Worksheet.
Where can that basis deduction be recorded, or better, how? I've seen this asked and answered in very vague terms and specifics are needed.
Extra credit: Over 40 years, we've already depreciated this property below the amount of the 1099-S but not to zero so we can apply part of the payment to the basis reduction and the rest will be ordinary income by a depreciation recovery, I suspect. How would that be recorded?
