1099-S Received payment for right of way for gas pipeline. Did not sell property. Not sure where it goes on tax return

[PatriciaV · Accepted solution]

Yes, the sale of a right-of-way is reported as an Investment Sale. 

To find this section of TurboTax, use the Search/Find box, type in "investment sale", hit Enter, then click on "jump to investment sale." This will take you to the start of the investment sales section.

In order to record this properly, you have two choices:

1) You may allocate a portion of the adjusted basis in your property to the area of the right-of-way. This could be acreage or square footage. This option will reduce a) the amount of capital gains on the sale and b) the basis of your property when it is sold in the future.

2) You may report zero cost-basis for the right-of-way, which will make the entire proceeds from the sale subject to capital gains tax (generally 15% or 25%, depending on your tax bracket).

Under either option, the purchase date is the date you originally purchased the property.