I received a 1099-MISC with a Box 3 value in it for a property settlements for loss in value of property (an investment REIT). Property settlements for loss in value of property that are less than the adjusted basis of your property are not taxable and generally do not need to be reported on your tax return. (per PUB4345) I cannot just forget that the investment firm sent me the 1099 (lest incur the wrath of the IRS), so I need to make an adjustment to my return. The value in Box 3 is less than the value of the REIT at this point, so none of the Box 3 figure should be taxed as income. I cannot figure out how to account for this "non-taxable" 1099-MISC data. I called TurboTax Help desk but they could not find an answer. I can just delete the 1099-MISC and hope for the best, but I learned in the Army that hope wasn't a strategy. Please, can anyone help me? Thanks!
