Here is what the IRS FAQ states:
If you cannot get the form corrected, the error should be reported on Form 1040, Schedule 1, Additional Income and Adjustments to Income PDF, Part I, Additional Income, Line 8z, Other Income, with an offsetting entry in Part II, Adjustments to Income, Line 24z, Other Adjustments.
For example, you took a trip with your friend and you paid for the airline tickets. If your friend reimburses you $2,500 for their airline tickets, and you received a Form 1099-K reporting the $2,500 as gross proceeds, your Schedule 1 should reflect the following:
Form 1040, Schedule 1, Additional Income and Adjustments to Income
Part I – Line 8z, Other income. List type and amount: “Form 1099-K Received in Error …. $2,500” to show the proceeds reported on the Form 1099-K.
and
Part II – Line 24z, Other adjustments. List type and amount: “Form 1099-K Received in Error…. $2,500” to offset the proceeds reported to you in error.
