Royalty?

[JT2307]

If I sold my the stone wall on my property would that be considered royalties? or other income? -

[ATSMAN]

Royalties protect the owner of intellectual property (like copyrights, patents, and trademarks) and other types of property. These royalties are granted by agreement, and they allow others to use the property, giving the owner the benefit of an income from this use.

So in your question are you selling the stone wall, or the stones or are you allowing someone to use it? It would be sale or rent. I don't think it is intellectual property unless there are details missing in your post.

[JT2307]

I sold the stone wall - they removed the wall and in turn sold it to a stone yard.

[EvenKeelTax]

I'd say capital gains, most likely long-term capital gain. Not sure how to calculate cost basis for the wall, though. I'd guess basis would be next to nothing or an incredibly low dollar sum. How much did it sell for?

[ATSMAN]

I'd guess basis would be next to nothing or an incredibly low dollar sum.

You are correct, especially if the stone wall was already on the property when OP purchased the property.

I have had this issue come up many times when homeowners buy a new property and there is something already on the property like a barn, detached garage, above deck pool etc. that they are selling separately.

One fair way to do it is to get from the seller what they paid for that and depreciate it to get to a FMV. If it is a barn or other structure, you can get from the county tax records the valuation of that structure (at least in my county).

But this is the first time a question about stone wall was asked. It is also possible that the stones were native to that land and the previous owner just stacked them out to make a wall. It happens a lot in our neck of the woods.

[JT2307]

The stone walls divided the property back in the day. So I agree other income reported as a capital gain with a basis of zero. Thanks for the input.