I agree with the other 3 answers, for your situation. Just report the income as rental income and don't worry about the 1099-Misc (#4 below).
That said, here's generic answer for an erroneous 1099-Misc situation.
If you received an erroneous 1099-Misc, you have several choices:
- Ideally, you get a corrected 1099-misc from the payer
- Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
- Report the income on Schedule E as rental income. Then Report it again as other income on line 8z, Schedule 1 income (enter in TurboTax at the 1099-Misc screen). Then zero it out by entering a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description. Call it something like "rental income reported on schedule E"
- Just report the income correctly (Schedule E) and hope you can explain it away when & if the IRS contacts you
