Property management business that received a 1099K from payment processor

[tnpm2019]

Hello, 

I have a small property management business and use software online to collect rent and send owner distributions. That payment processor sent me a 1099K for the total rents received through the online platform.

1. TurboTax Business seems to be directing me to enter that as total service receipts (income). Is that the right place to record this number, even though much of that amount was passed right on to the owners via distributions?

2. Where do I record the amounts passed back to owners via distributions? Can I enter that into customer returns since I never really "earned" it? 

Thank you for your help!!

[KrisD15]

Yes

The IRS has cracked down on payment services such as PayPal, and requiring 1099-K be issued. 

The official IRS instructions state this form is informational, however it might be a good thing to report it so he IRS has a paper trail. 

Yes, enter the 1099-K like income then start a miscellaneous expense ONLY for the pass-through amount so that it is easy for you and the IRS to see where the funds came and went.