I rcvd a 1099-misc for a refundable deposit with the $600 in Box 7. I can't enter this against the rental house because the amount is in box 7. How can I handle this?

[kschrei]

This is a portion of a refundable security deposit paid by a charity on behalf of the tenants.  I shouldn't be paying taxes on it because it will eventually be refunded.  Turbo tax won't accept it being entered as a 1099 for rent because the amount is in box 7 instead of box 1.   It has to be entered as a regular 1099-misc.  

Also, this house is owned 50/50 with another person who is not on the 1099 so only $300 of the $600 is mine and the other $300 is for her to put on her taxes.   But none of it is really "ours" - it is the tenants.

When I enter my $300 as a regular 1099-misc, and then take an "other deductions" against the house, it does not wash.   The tax liability is still increased by about $50 as a result of these 2 entries.

Appreciate any help.

[IreneS]

Do not enter the number from the 1099-MISC.  You are correct -- as a deposit it is not considered rental income.

If, for some reason, the IRS questions why the 1099-MISC was not included in your return, just explain that the amount was a security deposit.

[kschrei]

Do I enter the 1099-misc, and then just leave the amount blank an include an explanation, or just not enter the 1099 at all.

[IreneS]

Do NOT enter it at all -- It is NOT income.

[Siddharth100]

I have similar situation and I would like to do the same (not report the security deposit in Box 7 of 1099-Misc) but why do property manager use 1099-misc (box 7) to report security deposit, especially if this means everyone has to work around it by first not reporting it and then giving explanation to IRS?