BobH Posted December 11, 2019 Report Posted December 11, 2019 Does anyone have experience with the tax treatment of a cell tower lease buyout? Quote
JimTaxes Posted December 11, 2019 Report Posted December 11, 2019 client of mine has this.. it can be confusing.. my client is getting paid over time on the buyout. i have a 6252 installment sale form populated and that kicks off interest income and installment sale gain.. mine is all gain as there was no basis 2 Quote
DANRVAN Posted December 12, 2019 Report Posted December 12, 2019 Like many tax issues, it depends on the facts and circumstances. The concern is whether the income is capital or ordinary. What exactly is the client selling? if he/she is selling a future stream of income, based on present value calculations, it is ordinary income under the "substitute-for-ordinary income doctrine." The courts have applied that doctrine to the sale of rights to lottery winnings. If on the other hand, the taxpayer is selling a perpetual easement with exclusive rights to the land the tower sits on, that is the sale of a capital asset. 2 Quote
schirallicpa Posted December 12, 2019 Report Posted December 12, 2019 The one I dealt with was DANRVAN's former - sale of future stream of income - ordinary income. Quote
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