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1099-S

Level 2

Client received a 1099-S.  No real estate was sold.  It was for the utility company to access the property for maintenance.  Paid client $1000.  I guess you would call it utility rights.  I am using Pro Series Professional.  Where is it reported?  

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Level 11
Level 11

I am thinking you gave them an easement, the ones I've seen come on a 1099-misc. It is not put on your tax return.but I would attach a letter explaining you received a 1099-S, and it was for an easement. This is from IRS:

Easement.

The amount received for granting an easement is subtracted from the basis of the property. If only a specific part of the entire tract of property is affected by the easement, only the basis of that part is reduced by the amount received. If it is impossible or impractical to separate the basis of the part of the property on which the easement is granted, the basis of the whole property is reduced by the amount received.

Here is link to pub 544: https://www.irs.gov/publications/p544#en_US_2018_publink100072263

Level 12

I would report it on Schedule D as sale of an easement, with cost basis the same as amount received ($1,000) assuming the basis of the property is not less than that.  I don't think $1,000 is enough to generate a CP-2000 by itself, but sometimes we don't know what other issues are lurking in the information returns.  You could attach a statement that "Basis of property reduced by amount shown as cost on Schedule D," although I doubt anyone would read it.  

Level 2

Received two 1099-S in the amount of $1000 each.  Thanks for your response.

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