As ToddL99 indicates above, down payment assistance is not considered taxable income. Since you were issued a 1099-MISC a copy also goes to the IRS. You could not include it in your return, but then you will be hearing from the IRS in the future because they don't see it in your return.
In order to keep the IRS informed and happy, follow the instructions ToddL9 lists above:
- Enter the 1099-MISC in your return; AND
- Make another entry with a negative number to cancel out the payment.
