Wouldn't it be simpler, and acceptable, to enter the 1099-MISC as you indicated through 1099-MISC and Other Common Income>Income from Form 1099-MISC and NOT negate the same in Less Common Income>Miscellaneous Income, as well as NOT reduce the expense on Schedule E? This reflects the 1099-MISC income the IRS will be looking for, and offset the expense in Schedule E. I ran it through the return both ways and the difference in the impact was immaterial on the Federal taxes.
