When filing taxes.....is there such a thing as "damages" ? - GoMarcellusShale.com2024-03-28T08:45:07Zhttps://gomarcellusshale.com/forum/topics/when-filing-taxes-is-there-such-a-thing-as-damages?commentId=2274639%3AComment%3A726366&xg_source=activity&feed=yes&xn_auth=noThat should be taken into acc…tag:gomarcellusshale.com,2016-04-06:2274639:Comment:7264962016-04-06T04:30:36.032ZMichael Allenhttps://gomarcellusshale.com/profile/MichaelAllen
<p>That should be taken into account when you ne</p>
<p>That should be taken into account when you ne</p> What you say about a judge an…tag:gomarcellusshale.com,2016-04-06:2274639:Comment:7264952016-04-06T02:59:13.482ZLynn mudderhttps://gomarcellusshale.com/profile/VickiHerold
What you say about a judge and going to court could be true, BUT, what I was trying to point out is re sale. Would you pay as much for a piece of ground that you could not construct a house, barn, or even a garage or shed on?
What you say about a judge and going to court could be true, BUT, what I was trying to point out is re sale. Would you pay as much for a piece of ground that you could not construct a house, barn, or even a garage or shed on? That is a good argument.
Unfo…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7266982016-04-05T23:00:31.774ZINVICTUShttps://gomarcellusshale.com/profile/rstlun
<p>That is a good argument.</p>
<p>Unfortunately, if the potential Row lessee takes you to court. they'll ask a judge for, and the judge will grant an appraisal of the property as it stands today, it's valuation having nothing to do with what the landowner "could do" or "might do" with the property or its potential for anything other than what it typically is: Farmland or forest or other wasteland.</p>
<p>There is, unfortunately, much precedent for this type of behavior in condemnation…</p>
<p>That is a good argument.</p>
<p>Unfortunately, if the potential Row lessee takes you to court. they'll ask a judge for, and the judge will grant an appraisal of the property as it stands today, it's valuation having nothing to do with what the landowner "could do" or "might do" with the property or its potential for anything other than what it typically is: Farmland or forest or other wasteland.</p>
<p>There is, unfortunately, much precedent for this type of behavior in condemnation actions.</p> The biggest "damage" in my op…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7264642016-04-05T12:56:52.245ZLynn mudderhttps://gomarcellusshale.com/profile/VickiHerold
The biggest "damage" in my opinion is never being able to construct a building over, or even, close, to a pipeline. This would absolutely devalue your land if you wanted to sell it. No construction is a huge problem.
The biggest "damage" in my opinion is never being able to construct a building over, or even, close, to a pipeline. This would absolutely devalue your land if you wanted to sell it. No construction is a huge problem. A pipeline right of way easem…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7265762016-04-05T00:55:40.851ZMichael Allenhttps://gomarcellusshale.com/profile/MichaelAllen
<p>A pipeline right of way easement agreement does not allow for a commercial fiber optic line unless it specifically states that it is. If it does give the right for a commercial forber optic line, then the landowner should be so compensated. Normal fiber optic language only allows for the company to lay a fiber optic line to serve the pipeline company's communications for operations and maintenance and only for the pipeline. A good attorney would see this in an instant.</p>
<p>A pipeline right of way easement agreement does not allow for a commercial fiber optic line unless it specifically states that it is. If it does give the right for a commercial forber optic line, then the landowner should be so compensated. Normal fiber optic language only allows for the company to lay a fiber optic line to serve the pipeline company's communications for operations and maintenance and only for the pipeline. A good attorney would see this in an instant.</p> I'll tell you a funny story;…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7263802016-04-05T00:50:21.116ZMichael Allenhttps://gomarcellusshale.com/profile/MichaelAllen
<p>I'll tell you a funny story; a big rancher in Texas many years ago got into a condemnation fight with Exxon over what the appraised value of his west Texas desert lands were worth. Exxon used the assessor value of $40/acre and said the highest and best use of the property was cattle range land. The rancher argued that because of all the previous payments from non-eminent domain pipeline companies, his land was worth $400/acre and thus the lands highest and best use was for pipelines, not…</p>
<p>I'll tell you a funny story; a big rancher in Texas many years ago got into a condemnation fight with Exxon over what the appraised value of his west Texas desert lands were worth. Exxon used the assessor value of $40/acre and said the highest and best use of the property was cattle range land. The rancher argued that because of all the previous payments from non-eminent domain pipeline companies, his land was worth $400/acre and thus the lands highest and best use was for pipelines, not cattle grazing. The judge ruled in favor of the rancher and he got his $400/acre. The next year, his assessment went to $400/acre and his tax bill was so high, he went bankrupt. A word to the wise that these county assessors are not stupid and read the writing on the wall.</p> I'll repeat it again, how are…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7263792016-04-05T00:44:00.649ZMichael Allenhttps://gomarcellusshale.com/profile/MichaelAllen
<p>I'll repeat it again, how are you being damaged? If the company has the right to condemn, then you need a letter from the company stating just that. Then all of the easment money is not taxable, it is a taking, just as if the government took it themselves. On the other hand, if the company does NOT have the right to condemn, then you could have told them to go fly a kite and go around you. BUT, if they made you an offer you couldn't refuse, then every stinking dollar is taxable according to…</p>
<p>I'll repeat it again, how are you being damaged? If the company has the right to condemn, then you need a letter from the company stating just that. Then all of the easment money is not taxable, it is a taking, just as if the government took it themselves. On the other hand, if the company does NOT have the right to condemn, then you could have told them to go fly a kite and go around you. BUT, if they made you an offer you couldn't refuse, then every stinking dollar is taxable according to the IRS field agents we had talk to us. Damage money is just a name and by all rights should be one money including crop payments and timber. It isn't that complicated.</p> Reduction of land values from…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7265752016-04-05T00:34:13.926ZMichael Allenhttps://gomarcellusshale.com/profile/MichaelAllen
<p>Reduction of land values from the pipeline has never been proven. I have seen numerous appraisals tried by landowners thinking they had lost a lot of value due to a pipeline, but has never been proven in courts. On the other hand, I have also never seen a landowner sell their property and have it discounted to a potential buyer saying there is a pipeline on the property and therefore it's not worth as much as my neighbors.</p>
<p>Reduction of land values from the pipeline has never been proven. I have seen numerous appraisals tried by landowners thinking they had lost a lot of value due to a pipeline, but has never been proven in courts. On the other hand, I have also never seen a landowner sell their property and have it discounted to a potential buyer saying there is a pipeline on the property and therefore it's not worth as much as my neighbors.</p> I think that if you could pro…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7263782016-04-05T00:23:11.515ZKyle Nuttallhttps://gomarcellusshale.com/profile/KyleNuttall
<p>I think that if you could prove to the IRS that the value of the damages was the value that you were paid then yes, it could happen. I think that in most situations you would end up getting far less for the ROW than your neighbor would, though, because the value of the property damage is going to be less than what a pipeline company is willing to pay for the ROW. In other words, in order to pay zero taxes you would have to take far less in payment than you could get if you took both…</p>
<p>I think that if you could prove to the IRS that the value of the damages was the value that you were paid then yes, it could happen. I think that in most situations you would end up getting far less for the ROW than your neighbor would, though, because the value of the property damage is going to be less than what a pipeline company is willing to pay for the ROW. In other words, in order to pay zero taxes you would have to take far less in payment than you could get if you took both damages and taxable payment. I could be wrong, though. I'd love to be proven wrong.</p> What I learned in my income t…tag:gomarcellusshale.com,2016-04-05:2274639:Comment:7265702016-04-05T00:09:49.809ZKyle Nuttallhttps://gomarcellusshale.com/profile/KyleNuttall
<p>What I learned in my income tax class back in law school was that all income is taxable until proven otherwise. So from that stance even damages should be taxable. However....</p>
<p>Damages are paid to make you whole, in other words, to put you back into the position you started in before the activity took place. Put another way, they're for restoring your property to it's previous state. Since damages are just putting you back into the position you started in they are not considered to…</p>
<p>What I learned in my income tax class back in law school was that all income is taxable until proven otherwise. So from that stance even damages should be taxable. However....</p>
<p>Damages are paid to make you whole, in other words, to put you back into the position you started in before the activity took place. Put another way, they're for restoring your property to it's previous state. Since damages are just putting you back into the position you started in they are not considered to be income. The trick is to prove that the damages were reasonable. If it's determined that they were unreasonable then the IRS will adjust the amount of damages to what they think they should be. Usually damages are inflated, but if they are under-estimated the IRS could technically adjust them up and owe you money. Those are the basic principles as I understand them. The actual code could vary some year to year and the application to any given situation could vary.</p>