BobKamman
Level 15

If all they are buying is an easement, they are not taking the property.  Although it might look like it.  You reduce the basis of the property -- maybe the whole parcel, maybe just that part, it depends on the facts and circumstances.  If the payment exceeds the basis, the rest is capital gain.  And keep track of all this in case the property is sold 20 years down the (easement) road.  

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