This is for a rental property that is sent up in TurboTax as a Schedule E. In prior years when I had a property manager collect rent, I was getting a 1099-MISC from them to record rental income. In 2024, I decided to manage the property myself and am using an on-line payment portal to collect rent and therefore now got a 1099-K. Unfortunately because 2024 1099-K reflects "payments processed" (not necessarily real income), it included the security deposit the tenant paid along with 1st months rent. I am assuming, I should not include the security deposit in my Schedule E input of income since this is money I am holding on behalf of the tenant until their lease ends in 2025. But I am wondering will this raise a red flag with the IRS since Schedule E wont reconcile with the 1099-K they have on record for me?
