Gas Company wants to install pipeline under my land; Please help!

[sweep]

I presume you calculated out the depreciation of your property (who would want that deal?) and decided the 'forever' cash was worth it.

My friend has approx 500 acres. Pretty worthless ground to be honest 70-80% of it is steep hillside and unfarmable other than maybe having cows on it.

Let's see $2.5 million ($4950 per acre) + royalties (probabaly $30k-50k per month and that is very low prediction)for a farm that is worth maybe $350-400k on a good day..what should he do . Actually he took the forever cash and danced a jig all the way to the bank. Got his first $1.2 million dollar check 3 weeks back and another is coming in 6 months.


We signed for $4950 several weeks back but now it's up to $5200 and one guy just got $6100 per acre (confirmed) and at a meeting last week they say 6000-7000 acre is going to be the new norm-but we are happy with out $4950.

Really feel bad for the people that signed for $50-75 per acre last year.

 

[two_bit_score]

Also, any money received by granting an easement is taxable.
I found out the hard way, BTW...I thought it wasn't taxable (compensation for a loss of use rather then income). I don't know if there is anyway to get around it (talk to a tax expert before signing of an easement).

That is usually handled by the way the company reports the 1099. Which us open to negotiation at the time if the agreement.

 

[RoyJackson]

That is usually handled by the way the company reports the 1099. Which us open to negotiation at the time if the agreement.

I'm not sure if a tax liability can be avoided or negotiated, but it's definitely something to consider...

 

[quicksandfarmer]

I believe you're thinking of KELSO vs. New London (Supreme Court decision) and that decision was based upon the "public good" of a higher tax rate for upscale properties that would replace existing older homes. The case was not against a private concern or corporation. It was against the city of New London.
So, that example has no bearing in this thread...

The case is Kelo vs. City of New London. (Kelo v. City of New London - Wikipedia, the free encyclopedia)

It's very relevant here. The city of New London wanted to take Susette Kelo's house in order to turn it over to a private corporation, which would redevelop the land. Kelo sued, saying there was no "public use" in taking her land and turning it over to a private corporation -- the Fifth Amendment to the Constitution says "nor shall private property be taken for public use, without just compensation." . The Supreme Court ruled that the benefit that the community enjoyed from economic growth was sufficient to consider this taking to be "public use." Which pretty much upended 200 years of thinking about what was considered private property in the US.

Unless you live in one of the nine states where the state constitution defines public use more narrowly -- AZ, CA, FL, IO, OH, MI, NV, NH or WI -- this is the law of the land. The gas company could use the exact same reasoning -- economic benefit to the community -- to persuade the state to take your land on its behalf. You might not even know it was happening until the deal was done.

This is a terrible, terrible ruling, but it is the law.

 

[kude]

As I turn into my driveway off the main road I drive right over a major AT&T fiberoptic line ... so actually you can build access over at least some right-of-ways. Also, running parallel to that fiber right above it is a big set of power lines, so you can also drive under those.

I also have a natural gas pipeline running across my property, & there is no problem fencing across it. And I know where this line runs for many miles north & south of me, & I know quite a few folks have built driveways over it.

Although a pipeline certainly adds limitations to your property, I don't think it's quite as negative as some here have posted ... But then I'm sure the severity differs case-by-case.

AT&T fiber optic ROW are the worst. When installed in the late sixties they just took the shortest route across your land, no regard for future development. It cost a neighborinjg developer a lot to move it on his property edge. Fortunately it made moving mine at no cost necessary. Luckied out. Parents got $2000 in the deal. Now I woul;d just lease them an easement for an annual "fair" amount if I could get away with it. I kind ok kick myself for turning down $1500 a month for a cell phone tower to maintain property value. I had two companiies at 1500 each, woiuld have been good income. What is property value today? It's certainly down if not out.

 

[randy41]

The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. It reduces the basis of the affected part of the property. If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain.
This is from IRS Pub 17. sounds like if you grant an easement on 10% of your land than you would have to take the cost basis of the entire parcel times 10% and use that as the cost basis for reporting the gain. Unless some parts of your land are more valuable than others.

 

[tommu56]

I just went through this for road and pipe line right of way in north central Pa.

My thoughts whittle the width down mine went from 1st offer of 100ft from the center of the road to 50 ft from the center of the road for construction and the land man didn't even blink when I said I wouldn't go 1 more inch.

Then the pipe line right of way open ended on the first offer all surface rights do what ever they want routine to
2 6" gas pipes 1 HP and 1 LP and, 1 6" water pipe no surface use.

Then the road row 1st offer from 50 ft from center of the road to 12.5 ft this is an existing dirt road with no deed to any one just ROW agreements for the land owners.

All the road dimensions are from the center so each land owner is giving and edge of the property creating a 25ft road and 100ft construction right of way not transverseing or bisecting any one's property.

tom

 

[LBrown59]

I owned a small piece of land back in the 70's . Sold it then bought it back about 3 years later. Sold it again a little later to another guy who came back to me a short while afterward complaining there was a 4'' gas line through the property .

 

[2458n]

I am suprized Wind turbines were not mentioned. Really big deal in some parts of western Ohio. I think a cell tower would be okay if located far enough from living space. The view could be pretty nice for 3000 dollars a month. Farm has gas line in 1964 and high power lines in 65. Pretty much paid grand parents for the farm.

 

[bruceha2000]

This is a terrible, terrible ruling, but it is the law.

And a number of those same justices have decided that corporations are voters from the campaign finance POV. Worse, they can dump in all they want and anonymously at that. Great deal