Where do I enter 1099-S Proceeds from pipeline easement contract?

Forum|Forum|6 years ago
June 4, 2019
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Best answer by HelenaC

You normally do not report the income for granting an easement. You only reduce your cost basis in the property by the proceeds received.

But because you got a 1099-S, the IRS will be looking for it on your tax return. Report the gross proceeds as described above. but enter your cost basis as the proceeds, so that your taxable gain is 0.

Enter the 1099-S proceeds as follows:

Go to Federal Taxes
Wages and Income
Investment Income
Stocks, Mutual Funds, Bonds, Other
Click on either Start or Update
Answer NO to Did you get a 1099-B or a brokerage statement for these sales?
Choose 'Everything Else' as the type of investment you sold
Enter the remaining details for the sale your property.

HelenaCAnswer

Employee

You normally do not report the income for granting an easement. You only reduce your cost basis in the property by the proceeds received.

Enter the 1099-S proceeds as follows:

Go to Federal Taxes
Wages and Income
Investment Income
Stocks, Mutual Funds, Bonds, Other
Click on either Start or Update
Answer NO to Did you get a 1099-B or a brokerage statement for these sales?
Choose 'Everything Else' as the type of investment you sold
Enter the remaining details for the sale your property.

debback56

Where do I report this for our farm. I have a 1099-S from a payment from Atmos Energy Pipeline for a new easement through 90 acres to put their pipeline in.

lisabell2

I received income for a utility easement and received form 1099-S. How is this reported in turbo tax?

JamesG1

Report the payment as Other farm income at the screen Your Farming Income and Expense.

Then report an offsetting expense to zero out the income. Select Other miscellaneous expenses with a description such as 'right of way sold - basis adjustment'.

Did you sell a right of way easement? Do you still own the land and still pay property taxes on the land?

If you still own the land, the general treatment is that the payment is not income but reduces the basis in the land that you own. So, if you paid $10,000 for the land and received a right of way payment for $1,000, your new basis in the property is $9,000.

@debback56

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