This is a sticky situation.
Form 1099-NEC is Non-Employee Compensation.
It is used, and only used, for reporting payments to contractors and reported as Self-Employment income by that contractor.
Easements only lower the basis of the property. For example, if you bought a lot for 25,000 and the easement pays 2,000, your basis is reduced by 2,000 to be 23,000. There is no capital gain (or loss) for the easement. The 2.000 gain will be realized when you sell the lot.
There is no reporting required for an easement payment.
Usually an easement is reported on Form 1099-MISC. The income is not reported, but there is a way to enter the 1099-MISC and then back-out the income so that at least the form is accounted for on the return.
There is also no way to enter Form 1099-NEC into TurboTax without the program demanding Schedule C be filed for the income.
You'll have to ask the local government to correct the Form and use Form 1099-MISC, or not report the 1099-NEC and be ready to explain the situation to the IRS.
The only other suggestion I have would be to make a miscellaneous income entry and back that out. That way if you don't get an updated form from your local government office and the IRS inquires, you can show that you accounted for it.
To do this I would follow these steps:
go to
Wages & Income
Less Common Income
Miscellaneous Income, 1099-A, 1099-C
Other reportable income START
Type " EASEMENT ON 1099-NEC" or something similar for the Description and the amount
GO BACK TO
Wages & Income
Less Common Income
Miscellaneous Income, 1099-A, 1099-C
Other reportable income START
Type " reduction in basis for easement" or something similar for the Description
Enter the same amount AS A NEGATIVE NUMBER (put a minus sign in front (-) )
Both entries will be listed on Schedule 1 line 12
Keep the 1099-NEC with your tax file and make note to reduce your basis in that property
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