How do I report a 1099-s form for an easement which included both timber and land? This easement devalued the property and trees were removed that cannot be replanted.

[401camp]

The property was inherited with a land value of $359 per acre, but utility paid me $4000 per acre for land.  The trees were valued at $418 per acre and the utility paid me $1657 per acre for the timber.  The property cannot be replanted or used for anything accept the easement.  Do I have to report the difference in what it was worth and the proceeds on the 1099-s which did not provide a breakout of the land versus the timber?

[RichardG · Accepted solution]

You can combine the sale of the timber and the easement sale into one transaction for reporting purposes.  Presumably, the standing timber had a fair market value at the previous owner's death, and that value is your basis in the timber.  You clearly have taxable profit here, the difference between the amount you received and your basis in the land and timber.

 Please go to Federal Taxes>Wages & Income>Investment Income >Stocks, Mutual Funds, Bonds Other.  Proceed through the interview until you reach the question Choose the type of investment you sold, then select land.