I got a 1099 from builder for incomplete work on a building. How do I report it? I did spend that money for completing the work.

[Opus 17]

It's not taxable.  It's treated as a reduction in the price you paid for the building (reduction in your cost basis).  Then, any amounts you spent to finish or improve the building (whether from this check or other money) are added to the cost basis.  Keep your records as long as you own the building plus 6 years after you sell, including copies of correspondence with the builder or his attorneys documenting the problem and that this payment was for unfinished work, invoices for the replacement work, and so on. 

There are several possible ways to handle this on your tax return.  My preferred method would be to leave the 1099 off your tax return entirely.  Don't e-file.  Print your return and mail it, and attach a copy of the 1099 and a written statement explaining why this 1099 is not taxable income.  Keep copies of the letter and 1099 in case the IRS loses them and sends you a letter later this year asking why you left off the 1099 (this sometimes happens).