Go to income and choose 1099-K. Answer yes that the income includes non taxable income. Choose personal item sales or other. Input total amount for Box 1a. Click Amount too high. Enter the amount you want excluded, all of it if that is the case. You will see the amount excluded automatically on Sch 1 if you can see that form. The IRS designed that form for the first time this year to address this issue. Don’t worry about an audit as long as you can document the non taxable reason for the income exclusion. Millions of taxpayers are dealing with this.
