On Nov 12, 8:17 am, "Gil Faver" <rowdy'sb...[at]xxyz.com> wrote:

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What about the $500 fee. Say the basis is $300, fee is $500, and
selling price is $1000. Is the capital gain $700 or $200. I would
imagine that the $500 is a transaction fee that reduces profits, like
commissions when you sell a stock.

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"jack" <jack[at]yahoo.org> wrote in message
news:gfddlh$sej$1[at]registered.motzarella.org...
- quote -



- quote -

the easement took up x sq. ft. of the 100 acre farm. What is the basis of
the x sq. ft.? use that to calculate the gain, and pay tax.

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"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:JJmSk.125384$Mh5.15949[at]bgtnsc04-news.ops.worldnet.att.net...
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there" mean?

Pay tax on the easement pay? That's not a big deal.
- quote -

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"jack" <jack[at]yahoo.org> wrote in message
news:gf37sd$rt9$1[at]registered.motzarella.org...
- quote -

I recall (years ago) the case of a farmer granting an easement to a power
company. The price paid was not all that great (few thousand?), and it was
held that he had to prorate the basis of the property and pay capital gain
tax right there and then, not just lower his basis and pay it "someday".

But, I sure wouldn't do it this way for chump change.

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<removeps-groups[at]yahoo.com> wrote in message
news:afd2b145-705a-44be-8149-f6d0e4620060[at]a3g2000prm.googlegroups.com...
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It can't be. "Rents" are meant to be periodic payments (even if they occur
once).

This is a sale of property rights.

- quote -

Yes, there is a basis reduction (also) - but that's because part of the
asset has already been sold.

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On Nov 8, 9:11 am, "Paul Thomas, CPA" <paulthomascp...[at]bellsouth.netwrote:
- quote -

Could it be Schedule E rental income? That would allow you to include
the $1000 as income, and $500 fees as an expense.


- quote -

But a basic reduction would increase your capital gains when you
eventually sell (assuming you are above the exclusion). So it sounds
strange that you have to pay additional tax for allowing someone else
to use your land.

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"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote in message
news:sJjRk.66554$vX2.49879[at]bignews6.bellsouth.net...
- quote -

was never specified.
I guess I will find out when I get the written document.

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"jack" <jack[at]yahoo.org> wrote
- quote -




Are you giving the easement to the landowner or the power company?


The easement isn't a "sale" of the land. It's still in your name, you pay
property tax on that strip (or the spots where the poles are), and you can
sell ""that land"" and he can not (although a sale of his land would
presumably be inclusive of the easement rights). It's been a while since I
last looked into this type of thing, but I suspect that it's a basis
reduction as you lose the use of that land, or at least the use is
restricted.






--
Paul A. Thomas, CPA
Watkinsville, Georgia

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A neighbor needs an easement through my property to get electric.

I have tentatively agreed to allow it for $1,000; $500 for reimbursement of
my legal fees and $500 for the easement.

How do I handle this on my income tax? I presume the reimbursement isn't
taxable, but the sale of the easement is. As ordinary income, reduction of
the basis on the land, capital gains on sale of the "land", or something
else?

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