Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 249        March 5, 2004

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Easy Easement? » From: Port Matilda, PA Dear TaxMama: We sold a portion of our property to the Commonwealth of Pennsylvania as a conservation easement. It was less than a tenth of an acre in size. We received a 1099-S. Where do I enter the amount shown on the 1099-S and is it all taxable? Thanks Rob Hi Rob, How interesting! I am operating on the assumption that the rest of this property is home, yes? You may need to show the sale on Schedule D, as a capital transaction. Or, before you do anything, do some reading. IRS Publication 584 is about Casualty Losses. If they took your property, essentially by eminent domain, you have a casualty loss. You would report the transaction on Form 4684 - this will result in your reducing the cost of your home for tax purposes. I would still report the sale on Schedule D this way. report no gain or loss from this transaction (so just put the same amount in the cost column as you do in the sales price column). Attach a statement to the return explaining the transaction. You'll simply have a higher profit when you ultimately sell your home. Best wishes, Eva Rosenberg Your TaxMama

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