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Level 2
posted Jan 27, 2025 2:28:52 PM

How to report income from a Temporary construction easement when I only receive a 1099-s?

I received a 1099-s form (real estate transactions) for payment made by a utility company for a one-month TCE (Temporary Construction Easement).  I was expecting a 1099-MISC form and declare the amount as rental income on schedule E.  Did the utility company make a mistake and send me a wrong form?

0 3 1805
3 Replies
Expert Alumni
Jan 27, 2025 8:41:02 PM

It sounds like the utility company issued a 1099-S because the payment was classified as a real estate transaction, even though it was for a Temporary Construction Easement (TCE). This is not likely an error unless the payment permanently transferred property rights. 

 

Since the Temporary Construction Easement (TCE) payment is reported on Form 1099-S, but functions like rental income, it should be reported on Schedule E (Supplemental Income and Loss),

 

Here's how you can report this income in TurboTax:

  1. Log into TurboTax once logged in, click on the link in step 2.
  2. Click on Rentals, Royalties, and Farm" and 
  3. Click "Add a New Rental Property 
    1. If you have not previously reported rental income, select "Yes" to add a property.
    2. If asked, select "Land" or "Other" if the easement isn't related to an existing rental property.
  4. Enter Rental Income
    1. In the Rental Income section, click "Other Income" (not regular rent).
    2. Enter the amount from Form 1099-S as the easement payment.
  5. Enter Any Expenses (if applicable): If you incurred expenses (e.g., legal fees, property maintenance related to the easement), enter them in the Rental Expenses section.
  6. Skip Depreciation (Unless Rights Were Permanently Transferred)
    • If the easement was temporary, don't enter depreciation.
    • If property rights were permanently transferred, adjust the cost basis accordingly
  • [Edited: 1/28/25 l 9:14PM PST] @Zapit

New Member
Mar 17, 2025 9:35:26 PM

These steps are not correct for Turbo Tax online. I followed your link, it did not lead to that section. And then those questions are not following either. 

Expert Alumni
Mar 18, 2025 6:50:58 AM

The steps for adding a rental property or just adding income to include rental income can be done by using the steps in the link below. It will work in TurboTax Online 

@risa22