Where do you report land damages when a taxpayer receives a 1099-Misc with $2,000 in

[mikeburg]

Where do you report land damages when a taxpayer receives a 1099-Misc with $2,000 in box 3, Other Income?

I know we can offset the $2,000 with a deduction for the damage up to basis (basis reduction).

Thanks for any & all help. mikeburg

[Burke]

Land damages? What was the 1099MISC representing and who issued it?

[DaveinTexas]

Probably from an Oil Company

Was this from an oil/gas extraction company that accidentally bulldozed a 100 year old tree or some pipe fencing whilst exploring for minerals on your client's land?

I'd like to hear comments from the Board as to how to handle the reporting.

[Golden Rocket]

Income

Under most scenarios that would result in land "damage", this is most likely going to result in income. If paid to the landowner, it is simply income.

If the "loss" (whatever it is) is not paid, and the owner has to claim income nonetheless, the amount goes into the basis of the land.