1099-S

I received a 1099-S from my county and I'm trying to figure where or if I need to file it. It's a bit of a different situation as it wasn't really the sale of a home or property but the county required a construction easement of our property for work that is being done. So we still own the property but we received $3000 from them for how it'll affect our property (tree removal, electrical pole added, ditches, etc.). Could you please advise how I would go about entering this information?

481

Expert Alumni

Feb 5, 2020 8:31:47 AM

You don't normally report the income for granting an easement. You only reduce your cost basis in the property by the money received.

However, since you received Form 1099-S, report the 1099-S proceeds 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.

To enter your easement sale, click on Sale of a second home, an inherited home, or land.

IRS Publication 17 Basis of Property, Chapter 13, page 98, rules for reporting the sale of an easement are as follows:

Easements. The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. It reduces the basis of the affected part of the property. If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain.

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1099-S