How to enter 1099-NEC from County for road project?

[ahinman1]

I received a 1099-NEC in the amount of $25,990.00 from my county for a road project going in at the back of my residential property.  What I was paid for is broken out below but the 1099-NEC only has box 1 with the $25,990.00 amount.  How do I enter this in TT Premium?

Permanent Easement $8,000

Temporary Easement $7140

Contributory Value of Landscaping $7270

Sprinkler System $3580

[RobertB4444]

This shouldn't have been paid on a 1099-NEC so you can request that they send you a 1099-MISC instead or just enter it as follows-

Enter the 1099-NEC just as it appears.  On the 2nd screen after you enter the information from your form it says "Does one of thes uncommon situations apply?".  Tick the box next to "This is not money earned as an employee or self-employed individual, it is from a sporadic activity or a hobby (This is not common)".

This will enter the entire $25,990 into income for you, although none of it will have self-employment tax included.  Now you can remove the portions that are not taxable.

Go to the Wages and Income section of your federal return and scroll all the way to the bottom.  Under 'Less Common Income' click 'Miscellaneous Income' at the bottom.  Enter the description for the amounts that you listed above that were reimbursements (Contributory Value of Landscaping, etc) and then enter their value as a negative number.  You can do this for as many as you have.  What remains for you to be taxed on is the value of the easement that you were paid.  

@ahinman1 

[ahinman1]

Thanks you Robert!  Would I enter the value of the permanent easement and the temporary easement as negative numbers also, or only the sprinklers and trees?

[RobertB4444]

Temporary easement is just income.  You let someone use your property and it didn't cost you anything.  You have to pay tax on that.

Permanent easement is more complicated.  Your property has value and a permanent easement - which transfers with the property when sold - reduces the value of your property.  This reduction in value is the basis of the sale of the easement.  It can be tricky to figure.  You can check the reduction in taxable value for your property and see what it did there or consult with real estate professionals in your area.  It may be that the value isn't changed at all and the full amount is taxable.  You're going to have to do some homework.

Here is an article on easement value.  It's about conservation easements but the portion on valuation applies to any easement.

@ahinman1