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Investors & landlords
Q. Any rules that allow some of it to be shielded from taxes?
A. Yes. Or, more accurately, allows you to defer taxes (which will be capital gains later).
You don't usually report payment for an easement. You only reduce your cost basis in the remaining property, by the amount you received, for when the property is sold in the future.
But, if you got the 1099-S, it must be reported on your tax return, but it is still, most likely, not taxable. For how to enter the 1099-S, see https://ttlc.intuit.com/community/taxes/discussion/you-don-t-usually-report-payment-for-an-easement-...
‎July 18, 2022
3:28 PM