Hilary Receives $10,000 for a 15-Foot Wide Utility Easement Along

Essay

Hilary receives $10,000 for a 15-foot wide utility easement along one of the boundaries to her property. The
easement provides that no structure can be built on that portion of the property. Her adjusted basis for the property is
$200,000 and the easement covers 15% of the total acreage. Determine the effect of the $10,000 payment on
Hilary's gross income and her basis for the property.