Firebreak

[JG EA]

The county paid the homeowner to make a firebreak if the homeowner followed their rules. They reported on a 1099-Misc non employee comp. Line 21 seems right but wondering if any of you have any knowledge about this kind of thing.

Thank you.

[Zee]

Is this an easement?

JG-

Take a look at Bee Knees response to "City removed Owner's Trees". He describes the proper treatment for an easement. The situation you describe also appears to be an easement, unless the firebreak actually increases the value of the property (which is doubtful).

Bees suggested showing the reimbursement on line 21, and then zeroing it out with a note on the easement. If the firebreak isn't an easement and increased the value of the property, it would seem the reimbursement is taxable income on line 21 (without zeroing it out) and increases the basis of the home.

[JG EA]

Well, I don't think it is. I think it's just to prevent fires. I will ask though.