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Water rights
January 11, 2023
Q. We are a municipality and made a one time purchase of 2.165 inches of a ditch, in 2022. Would this be reportable as Rent in Box 1 of the 1099-MISC, or is this a real estate transaction and reportable on 1099-S?
A.
(Answered by IOFM's third-party tax experts)
If this is for ownership in perpetuity (no fixed term, no end date) then it's not a rent payment; report on Form 1099-S, reporting threshold $600. If it has a fixed term but the term 30 years or more, then it's not a rent payment;…
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