1099S PROCEEDS FROM AEP PURCHASING RIGHT OF WAY

[dsg]

I have a client who received proceeds reported on a 1099S. It is for a right of way for the electric power company. Is it taxable? How do I report it?

[PATAX]

I would imagine it's taxable since I believe right of way for gas or oil pipelines and so forth is taxable. But I'm not sure why they didn't put it on a 1099 miscellaneous form.

[Skylane]

Maybe this article will help. No idea how to calculate the basis.

https://www.bergankdv.com/resources/blog/proceeds-from-an-easement-or-right-of-way-2lscpa/

[BobKamman]

Proceeds from sale of an easement reduce the basis.  When the basis is reduced below zero, then you start reporting gain.