Looking at your original statement, I assumed the vendor returned and issued you a 1099 for the amount of the security deposit. You would report this as income in your business tax return. In this case, it is $1017. If this is the case, did the vendor report the income as $1017 on the 1099?
If this is the case, you would report $2460 as an employee benefit expense as an expense in your business tax return. The overall effect is that the return of the security deposit will offset the amount of the rent paid leaving a difference of $1443. The Turbo Tax program will handle this.
Please let me know if I have these assumptions correct.
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