Paypal 1098b for S Corp personal funds

[brit67chick]

I had a large bill and there were not enough funds in my business (LLC) to cover it. I added $7k in personal money to my paypal.com account to pay the bill.  PayPal sent me a 1099 for $7200, of which only $200 is business income.

I report on 1120s. How do I handle this 1099?

[ThomasM125]

I think you mean that the 1099 form is reporting income in the name of the business. If so, as long as your business sales reported on your Form 1120-S are more than the total of the income reported on the 1099 forms, you don't need to do anything with them. Otherwise, you can report the income as sales and enter an expense to cancel it out, called "misreported income" or something similar.

If you mean the income is being reported to you personally, it would be best to enter it on your personal tax return in TurboTax and enter a negative adjustment to "other income" to back it out as follows:

1. From the Federal menu in TurboTax find Wages and Income 

2. Find Less Common Income

3. Choose Miscellaneous Income, 1099-A, 1099-C

4. Choose Other Reportable Income

5. Enter a description of the misreported income and the adjustment as a negative number