Here's how you will enter that 1099-MISC in TurboTax so it's not treated as self-employment income by the program. Then you will negate it's taxability by claiming your loss in the Casualty & Thefts section of the program under Deductions and Credits.
Reporting 1099-MISC (box 3 or box 7)
that is not self-employment income
Under the Wages & Income tab (or Personal Income tab)
scroll down to Other Common Income and elect to start/update Income from form
1099-MISC. Then click YES to indicate you have a 1099-MISC.
Enter the 1099-MISC exactly as printed, and then
Continue.
Enter the reason you got this money – be it scholarship,
bonus,
whatever. Then continue.
Select None of these apply, then Continue.
Select No, it didn’t involve work….. and Continue.
Select ONLY the tax year for which this specific
1099-MISC was issued. Do not select the year that you received the 1099. Select
the year for which the 1099-MISC was issued. Select no other year. Then
Continue.
Select No, it didn’t involve an intent to earn money, then
Continue.
Select NO, then Continue.
Click the DONE button, and that does it.
