Get your taxes done using TurboTax

Yes, you can report the $5000 as taxable income and then negate it. 

1. Open your return in TurboTax 
2. Click on Wages & Income 
3. Scroll down to All Income
4. Scroll down to Less Common Income 
5. Scroll down to Miscellaneous Income, 1099-A, 1099-C 
6. Click start 
7. Scroll down to Other reportable income 
8. Answer yes and record this as 1042S income and then the amount.

Now to exclude it:

1. Repeat steps 1-7.
2. Record this as a US/China Treaty Exemption
3. Now enter the amount with the minus sign in front of the income.

You have now reported to 1042 S and exempted it in accordance with the US China Treaty Exemption.

@tyk