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Tax Treatment Of A Perpetual Easement

Discuss anything to do with property law - buying, selling property

Tax Treatment Of A Perpetual Easement

Postby Karlitis » Sun Dec 04, 2016 7:17 am

s About Taxes)/Tax treatment of a perpetual easement Advertisement Expert: John Stancil, CPA - 11/10/2010 I have a farm and I have been paid $300k by a wireless company for rights to put a tower on my land.  I have not sold the land just the rights and after the tower is no longer needed the rights revert back to me.  Is the Payment subject to Capital gain treatment?  
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Tax Treatment Of A Perpetual Easement

Postby Ambrosius » Tue Dec 06, 2016 7:23 am

s About Taxes)/Tax treatment of a perpetual easement Advertisement Expert: John Stancil, CPA - 11/10/2010 I have a farm and I have been paid $300k by a wireless company for rights to put a tower on my land.  I have not sold the land just the rights and after the tower is no longer needed the rights revert back to me.  Is the Payment subject to Capital gain treatment?  
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Tax Treatment Of A Perpetual Easement

Postby Cyrill » Fri Dec 09, 2016 1:10 am

Catherine,

Thanks for your question.

If it is a perpetual easement that denies you the beneficial use of hte property, it can be treated as a sale.  You would need to allocate basis to the affected property and pay taxes on the excess of proceeds over the basis.  It would be subject to capital gain laws.

If it does not qualify as a sale, the proceeds can also be givne capital gain treatment.

This is a rather detailed part of the law and I encourage you to consult with a CPA or other qualified tax preparer on this issue to help you complete your return properly.

Hope this helps.

John Stancil, CPA  
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