follow the cp2000 instructions which may require an amended return for the $13. include an explanation about the 1099-K (note what was suggested in the other Turbotax thread is only if you can't get a corrected 1099-K, see below, but the IRS prefers that he try to get a corrected one. then he would have correspondence to back up the claim). Here's is what the IRS says.
What Shouldn't Be Reported on Form 1099-K
Money you received from friends and family as a gift or reimbursement of a personal expense should not be reported on a Form 1099-K. These payments aren't taxable income. Be sure to note these types of payments as non-business when possible in the app.
Take these steps if you receive a Form 1099-K in error
If You Get a Form 1099-K in Error
You may get a Form 1099-K in error when the form:
- Reports payments that were gifts or reimbursements from family or friends
If this happens:
- Contact the issuer immediately – see FILER on the top left corner of Form 1099-K
- Keep a copy of the original form and all correspondence with the issuer for your records
Take these steps if you can't get a corrected Form 1099-K.
If You Can't Get a Corrected Form 1099-K (he did this, but did he try to get a corrected 1099-k)
Report the amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.
Example: You receive Form 1099-K for $650 your roommate sent you for their share of rent.
On Schedule 1 (Form 1040):
- Enter the error on Part I – Line 8z – Other income: "Form 1099-K received in error, $650"
- Adjust it on Part II – Line 24z – Other adjustments: "Form 1099-K received in error, $650"
never use schedule C in this situation.
