The money is not taxable income to you, it is treated as a reduction in the purchase price. (This might increase your taxable capital gains whenever you sell in the future, but it is not taxable now.)
If you get a 1099 there are two ways to deal with it.
1. Do not include it on your tax return. File by mail, don't e-file. Attach a copy of the 1099 and a letter explaining why it is not taxable income. Don't attach other proof, but save your proof for as long as you own the house plus 3 years after you sell.
2. Include the 1099 as income. Then, go to the "other uncommon income" section and enter an item of income called "non-taxable 1099" and the amount is the negative amount of the 1099 that will offset the 1099. You can e-file after doing this, but the IRS may send you a letter asking for more information.
