Thank you - this community forum is a lifesaver! I have a follow up question as well. The full story is that the county offered around $40k for the easements (around $31k for permanent "land acquired" and $9k for temporary construction access). But because we are still paying a mortgage, our lender decided that they would take a proportion of that $40k that matched the proportion we still owed on the mortgage. So around $14k went to the lender, and the other $26k came to us. The 1099-MISC was for the $26k. So I think your answer explained how to handle the $26k in terms of income received and negative adjustment, but would I need to report anything for the $14k that went toward the principle on our mortgage?
