Submitted By: someone
Answered: September 26, 2018 10:00 pm

The city took part of my front yard to expand a road and sent me Form 1099-S and a check for $11,050? How do I report this?

A government’s exercise of eminent domain is really a condemnation where private property is legally taken for public use. Gain (or loss) from the event is the difference between the award you received and the adjusted basis of the portion of the property taken. If the award is more than your basis, you have a gain which you report as a capital gain unless you are eligible for and opt to apply the home sale exclusion. If the award is less than your basis, you have a loss which is not deductible. Find more information in IRS Publication 544 (https://www.irs.gov/pub/irs-pdf/p544.pdf).

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Tax Glossary

Straight-line method

A method of depreciating the cost of a depreciable asset on a pro rata basis over its cost recovery period.

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