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They should not have reported it as Rental Income, they should have reported it as an Easement Payment. 

You can still enter the 1099-MISC and then "back-out" the income. This way the IRS sees you reported the 1099-MISC, but you also report that it is not taxable. 

As stated earlier, the amount MIGHT be considered when you sell. Whatever the amount is would need to be subtracted from your basis, so if you paid 200,000 for the property and the easement was 5,000, your new basis would be 195,000 plus any other applicable adjustments. 

To enter in Home and Business, first delete whatever you entered for the 1099-MISC.

In "Step by Step" entry, Click "Personal Income"

Click "I'll choose what I work on"

Scroll down to "Other Common Income"

Click START or UPDATE next to "Income from Form 1099-MISC"

Enter the 1099- MISC on the next screen and click Continue

Select the last option "Nonbusiness income from the rental of personal property or equipment "

Continue 

"Do either of you have another 1099-MISC?" select "No" and Continue 

Click Done 

This will put the amount on Schedule 1 Line 8k, and included on the amount on the 1040  Line 8

Now we need to show that it isn't taxable.

Go back to the "Personal Income" section 

Scroll down to the VERY LAST option "Less Common Income" 

Click START or UPDATE next to the last option on that list "Miscellaneous Income, 1099-A, 1099-C"

Now scroll down to the VERY LAST option "Other reportable income" and click Start or Update

Select YES on the "Any Other Taxable Income?" screen 

Type "Reduction in basis for easement payment" for the description and the same amount you entered before but as a NEGATIVE (put - in front of the number) 

Click Continue and Done 

This NEGATIVE number should negate the income on the 1099-MISC

Schedule 1 will show both transactions so the IRS will understand what happened. 

There will be no impact to your 1040 Line 9 (Total Income) 

Keep copies with your tax file.