How does the IRS treat easement payments?

Easements are treated as a recovery of the basis of the property first, with any excess proceeds treated as capital gain, which is taxed at a lower rate than ordinary income. The basis of property that offsets an easement is limited to the basis of the affected acres or square footage.

How do you read an easement?

Easements will be shown on the survey and are usually delineated by dashed lines. Easements are not ownership, but are “Rights”, usually for a specific use. An example of an easement would be a 10′ utility easement on your property.

What is the difference between a row and an easement?

What are Easements and Rights-of-Way? Easements are nonpossessory interests in real property. More simply, an easement is the right to use another’s property for a specific purpose. Rights-of-way are easements that specifically grant the holder the right to travel over another’s property.

What does it mean to have an easement on your property?

An easement is one person’s right to use land for a certain purpose when it is owned by someone else. If there is an easement on your land , the property is yours, but other people can use it or access it.

What should be included in a transmission easement agreement?

New transmission easement agreements specify the type, height limits, and number of new structures; the line voltage; and the ROW width. If the ROW and structures are appropriate but the old easement can be improved in other ways, the utility might offer to renegotiate the easement contract.

Why do we need power line row easements?

The ROW allows the utility to keep the line clear of tall trees, buildings, and other structures that could interfere with line operation. If they are needed, the utility also obtains easements for access roads to get to the power line ROW.

Where can I find a transferable easement on my property?

Generally, transferable easements are listed on a deed or other legal documents disclosed when purchasing the property. It’s your responsibility to check for easements before erecting or building on any area of your property.