Pipeline payments taxable??

[jmh]

Are payments received from pipeline right-of-way payments taxable? thanks

 

[Bob85355]

Yes

Bob

 

[2x4]

depends on the payments. If the payments are for damages or losses, no , they're not taxable because they are reimbursements for your loss. You already paid the taxes on the proerty you lost when you earned the income to buy it.

 

[El Toro]

If you received a statement from them at the end of the year you probably will need to include that as income. You can call the IRS and talk to someone about this to be on the safe side. Hal

 

[Coloken]

You should get a statement from them. In my case- power line- it would be like a lease. If what 2x4 says, what I got for damage would not be? Wouldn't payment for damage be the same as the crop that you did not get? Or would it be for permenent damage that reduces the value of the property? In my case it was for grass damage that will restore itself in a year or two. Some good questions here
Kenny

 

[Sid]

Probably are, I am not sure. If the Fair Tax plan was in effect they would not be.
Untitled URL Link

 

[T_Bone]

I would think that the payments could also be claimed as ROC (return of capital) or the current value of the property of when the lease was started. I also would choose a land value on the upper end of the scale for your area.

If that was true then one could also claim deductions for insurrance, property taxes, matintance, etc; that would be applied to that strip of land as the precentage of the whole.

Then if it's held as a investment, it must have been as it's now leased, then excess income would be taxed at the 10% rate as it was held for investment longer than a year.

T_Bone

 

[Texasmark]

The 1099 will determine the answer. If they deduct the payment from their taxes they will issue you a 1099.....and send a copy to the IRS.

You include the 1099 as income subject to withholding. It's not wages, so it goes on a different line on the 1040. You don't pay SS taxes on it.

Mark

 

[Anonymous-0]

Yes. IRS pub 225 the Farmer's Tax Guide spells it out. You can reduce the basis on the affected portion of the ground. You can find Pub 225 at www.irs.gov.