Linus' basket in Stardew Valley is located in the Backwoods area, which is just to the left (west) of the Bus Stop. The basket is found near the tunnel entrance, next to some bushes. Its brownish color can make it hard to spot, especially in the Fall when the ground and foliage are orange and brown. To find it, go to the Bus Stop (to the right of your farm), then follow the road to the left until you see the basket on the upper side of the street by the bushes near the tunnel entrance. After picking up the basket, return it to Linus, who is usually found near his tent close to the mountains past Robin's house.