[Jad022161]

I am a sigle parent of 1 child and make 31,900 a year, I own a property that the local town is paying me 14,500 for an easement. What will my tax liability be for that winfall

[ebaines]

No tax liabaility - at least not yet, asuming that the $14.5K payment is less than your original cost basis in the property. You may think it's a windfall, but it is esentially a payment to compensate you for loss of property value due to the easement. When you go to sell the property in the future you can expect that the amount you can get from a buyer will be $14.5K less than if the easement did not exist. So your capital gain on the property may be less, but because of the payment you have to deduct that amount from the tax cost basis of the property. The result is that if the $14.5K payment accurately reflects loss of market value you come out whole.

If the $14.5K exceeds your cost basis, then you report the $14.5K minus your cost basis as a capital gain. Your new cost basis is set to $0.