I received a 1099-S for a county ditch redetermination easement on farmland

Forum|Forum|11 months ago
April 7, 2025
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I have a 1099-S for a county ditch redetermination easement on my farmland property that I rent out. Turbo Tax brings up Home Sale Worksheet for that form. There is no cost basis for this since there is no property or land involved. What or where do I enter the information? I also got a bill for a larger amount for maintenance of this ditch which I paid and recorded on Form 4835 as other expenses.

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Best answer by PatriciaV

Since 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 $40,000 for the land and received an easement payment for $10,000, your new basis in the property is $30,000.

You still have to deal with the 1099 that was reported to the IRS. Report the income, then immediately report a minus entry for the same amount. Reference both entries as 'easement - basis adjustment'.

Follow the steps below to report this income that is not reported as self-employment income.

Select Federal from the left side of the screen.
Select Wages & Income on the left side of the screen.
Scroll down to Less Common Income. Click the down arrow.
Click Start / Revisit to the right of Miscellaneous income….
Click Start / Revisit to the right of Other reportable income.
At the screen Other Taxable Income enter the description of the income.
Click Add another Miscellaneous income Item and enter the reversing entry (an equal amount as a negative number).

View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.

The income will be listed on line 8z of the Schedule 1 Additional Income and Adjustments to Income and line 8 of the Federal 1040 tax return.

PatriciaVAnswer

Follow the steps below to report this income that is not reported as self-employment income.

Select Federal from the left side of the screen.
Select Wages & Income on the left side of the screen.
Scroll down to Less Common Income. Click the down arrow.
Click Start / Revisit to the right of Miscellaneous income….
Click Start / Revisit to the right of Other reportable income.
At the screen Other Taxable Income enter the description of the income.
Click Add another Miscellaneous income Item and enter the reversing entry (an equal amount as a negative number).

View the entries at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets.

The income will be listed on line 8z of the Schedule 1 Additional Income and Adjustments to Income and line 8 of the Federal 1040 tax return.

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mjr14Author

Thank you. Even though the form is 1099-S, it should be additional income? Won't they be looking for that entry on the Home Sales Form to match up with the IRS records? I did enter it as suggested and it does save me a bit of money.