topic 1099-s Sale of Land Easement in Investors & landlords

1099-s Sale of Land Easement

nikefiz — Mon, 09 Mar 2026 05:55:36 GMT

A utility company purchased a section of our property as a land easement. It was a one time lifetime easement purchase. How do I enter this ? I tried going through:

Your investments and savings
Add investments
Other
What type of investment did you sell - Other

I'm not sure this is right because I keep getting " Needs Review " and cannot seem to get past it.

I saw some questions and answers from 2019 and 2020, but it seems Turbotax has changed some things because those answers do not seem to correlate with what I am seeing. Any help would be appreciated!

Re: 1099-s Sale of Land Easement

Carl — Wed, 16 Feb 2022 23:03:00 GMT

First, you need to clarify something.

Did you sell a "right of access" easement? If so, that means you still own the land and you still pay property taxes on that land. Or did you actually sell the land, meaning that you no longer own it, and therefore your property tax assessment is reduced accordingly?

Re: 1099-s Sale of Land Easement

nikefiz — Thu, 17 Feb 2022 00:48:40 GMT

Yes, it is "Right of access" ... I will still pay taxes and own the land. They are cutting down trees to allow easier access to their utility lines.

Re: 1099-s Sale of Land Easement

Carl — Thu, 17 Feb 2022 00:59:17 GMT

From what I'm reading, since this is a lifetime easement you'll treat it as a sale and report it as such on SCH D. Apparently, it doesn't matter that it doesn't reduce the amount of taxable land you own. But it does reduce your cost basis in the property overall, "as if" you outright sold the property. For the simplest and best write-up I can find that explains this, see https://www.bergankdv.com/resources/blog/proceeds-from-an-easement-or-right-of-way-2/

So basically, you have to figure that portion of land the money was paid for. Then figure what percentage of your original purchase price of the property applies to that portion of land the perpetual easement payment was for. That will be your cost basis. If the money you were paid exceeds that cost basis (I'm sure it will) then you have a taxable gain. You'll only pay tax on the gain.

Re: 1099-s Sale of Land Easement

Hal_Al — Thu, 17 Feb 2022 01:16:44 GMT

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. But, if you got the 1099-S, it must be reported on your tax return, but it is most likely not taxable.

Report the 1099-S amount as sale proceeds, then show the same amount as your basis, for a net gain of $0. On your own records, reduce your cost basis by that amount for future sale.

TurboTax does not have an entry point for a 1099-S (other than home sale). So, In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Investment Income
-Stocks, mutual funds, Bonds, Other (Real estate is other)

Re: 1099-s Sale of Land Easement

codeman2727 — Tue, 22 Mar 2022 00:35:51 GMT

No, this doesn't appear to be correct. When you do this, there's a warning at the top that, once you select "Land (other investment purpose)", it says: "If this investment was used for business (rental, business expense, farm, etc.), don't report it here. Go to the Sale of Business Property section and report this investment there." Unless Turbo Tax internal is leading us astray.

Edit: Looks like the question was for personal use whereas I'm looking for answers for rental, so the answer does actually answer the posed question, doesn't answer mine though, still looking.

Re: 1099-s Sale of Land Easement

KrisD15 — Tue, 22 Mar 2022 01:08:08 GMT

As posted, an easement lowers the basis in the property.

Please go to your rental or farming section and select

"Sale of Property/Depreciation"

Select Yes, I want to go to my asset summary

Click Edit next to the asset which includes the land (this would most likely be the building asset)

Select Real Estate Property

Continue until you can edit the land cost and subtract the amount of the easement

If you received a 1099-MISC, you can enter that as Farm/Rental income, then subtract it out as an expense.

Mark it separate as a miscellaneous expense and title it "EASMENT REDUCED BASIS" so that it can be traced.

If you received a 1099-S, you can enter it on your personal side, then "zero it out" but it might be temperamental. You can enter the AMOUNT as Farm/Rental income and expenses it out, but there is no way to actually enter the 1099-S as income on the farm/Rental screens.

Keep the form with your tax file.

Re: 1099-s Sale of Land Easement

mmryan — Mon, 06 Jun 2022 20:47:46 GMT

I had a similar situation where a utility company purchased a section of my property as a land easement/right of way to replace electric transmission lines. I received a 1099-S and entered the amount from Box 2 into Turbo Tax online. The problem is none of my tax documents/forms (pdf) reflect this amount. What did Turbo Tax do with this information? I have already filed and received my 2021 tax refund. Should I attempt to file an amended return?

Re: 1099-s Sale of Land Easement

Hal_Al — Mon, 06 Jun 2022 21:26:00 GMT

Q. None of my tax documents/forms (pdf) reflect this amount. Should I attempt to file an amended return?

A. No. 1. Because easements are not usually taxable (see above). So, your amendment would not show any change and 2. if you entered it, it must have gone somewhere. If you entered it as described above, it should go on form 8949, then to Schedule D.

Re: 1099-s Sale of Land Easement

tm101 — Sun, 04 Feb 2024 00:03:57 GMT

i do not understand what i need to do.

Re: 1099-s Sale of Land Easement

tm101 — Sun, 04 Feb 2024 00:05:05 GMT

what do i do?

Re: 1099-s Sale of Land Easement

MonikaK1 — Sun, 04 Feb 2024 00:57:51 GMT

It depends. Do you also have a Form 1099-S for the sale of a land easement?

You normally do not report the income for granting an easement. You only reduce your cost basis in the property by the proceeds received.

However, because you received a Form 1099-S, the IRS will be looking for it on your tax return. Report the gross proceeds. but enter your cost basis as the proceeds, so that your taxable gain is 0.

Enter the 1099-S proceeds as follows:

Go to Federal Taxes
Wages and Income
Investment Income
Stocks, Mutual Funds, Bonds, Other
Click on either Start or Update
Answer NO to Did you get a 1099-B or a brokerage statement for these sales?
Choose 'Everything Else' as the type of investment you sold
Enter the remaining details for the sale your property.

If you are using your land to operate a farm, you can instead report the payment as Other farm income at the screen Your Farming Income and Expense.

Then, report an offsetting expense to zero out the income. Select Other miscellaneous expenses with a description such as 'right of way sold - basis adjustment'.

Re: 1099-s Sale of Land Easement

HaroldSuch — Sun, 11 Feb 2024 22:55:16 GMT

Where do i file this on my taxes ?

Re: 1099-s Sale of Land Easement

AbrahamT — Mon, 12 Feb 2024 18:08:44 GMT

Just to clarify, what are you trying to file, a 1099S

There are several places to enter your 1099S depending on why you received it. Click HERE for details.

No matter how you enter this information, you wouldn't have to include the form itself with your filing.

Re: 1099-s Sale of Land Easement

etparker2 — Wed, 10 Apr 2024 00:41:08 GMT

Thanks for the detail, I think I am following your instruction but want to make sure.

I did receive a 1099-S for a land easement, not a sale, just a permanent easement. Per your instructions, I am not entering this as the 1099-S, I am going to Fed Taxes, Wages and Income, Investment Income, Stocks, Bonds, Mutual Funds, Other, and selecting "other" as the "type of investment that I sold". Under "how did you receive this investment?", I answered "I purchased it", for the "description" I entered "utility easement". Under "when did you receive this investment" I entered the date I purchased my home. Under "date sold or disposed" I listed the date of closing on the 1099-S. I entered the Proceeds from the 1099-S and finally and this is the part I really am not sure about, the last box says "cost or other basis" and under "learn more" I read it to be the cost of the home? Is that correct?

Re: 1099-s Sale of Land Easement

etparker2 — Wed, 10 Apr 2024 00:45:59 GMT

Follow up to previous reply. I missed the instruction to enter the cost basis as the proceeds so that the gain/loss is $0.00.

Got it.

I'm still a little freaked out that I'm not actually reporting the 1099-S that I received.

Re: 1099-s Sale of Land Easement

DaveF1006 — Thu, 11 Apr 2024 21:56:12 GMT

1099-S is not a reportable document for IRS purposes thus does not require a specific entry in a return.

Re: 1099-s Sale of Land Easement

tfjason2 — Mon, 09 Mar 2026 01:14:29 GMT

it was for access for electrical pwr.,water and road access to do the work. I still pay taxes and own the land

Re: 1099-s Sale of Land Easement

JamesG1 — Mon, 09 Mar 2026 02:39:31 GMT

If you still own the land, the general treatment is that the payment is not income but reduces the basis in the land that you own. So, if you paid $10,000 for the land and received a right of way payment for $1,000, your new basis in the property is $9,000.

You still have to deal with the 1099 that was reported to the IRS. You may elect not to enter the income and then respond when and if a tax authority contacts you at a later time.

You may also report the income, then immediately report a minus entry for the same amount. Reference both entries as 'right of way sold - basis adjustment'.

In TurboTax Online, follow the steps below to report this income that is not reported as self-employment income.

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click the down arrow to the right of Less Common Income.
Click to the right of Miscellaneous income….
Click to the right of Other reportable income.
At the screen Any Other Taxable Income enter the description of the income.
Click Add another Miscellaneous income Item.

View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.

The income will be listed on line 8z of the Schedule 1 Additional Income and Adjustments to Income and line 8 of the Federal 1040 tax return.

@tfjason2