Hello,
I am a landlord with a Section 8 tenant, and the rent is paid by the Housing Authority (I received a 1099-MISC for this, which is all good).
Recently, I had to repair a garage door that was damaged by the tenant. Instead of using the tenant's security deposit, I utilized the "Landlord Mitigation Fund" (a Washington State program). The Department of Commerce reimbursed me for the repair costs and issued a 1099-NEC for the amount.
I’m now confused about how to report this 1099-NEC.
I operate as a single-member LLC and typically report rental income and expenses on Schedule E. However, when I try to report the 1099-NEC in TurboTax, it takes me through a lengthy questionnaire and seems to treat it as business income, requiring me to file it like a "business tax."
This payment was a one-time reimbursement for the repair, and I didn’t provide any services/business to receive it. Ideally, I’d like to report it as "miscellaneous income" and deduct the same amount as a repair expense.
Could you provide any guidance on how to handle this?
