Where do I subtract the income that is reported on the 1099-MISC for a rebate that is not taxable income ?

[evan1941]

I received a rebate (and 1099-MISC) from a Municipal Water District for the removal of turf and installation of drought tolerant landscape. I spoke with an agent from the IRS law department who researched the issue and told me that the rebate is not taxable income.
I entered information from the 1099-MISC. How do I subtract the amount of that income and add a statement referring to the information that I received from the IRS agent? I have his IRS ID number.

[DianeW · Accepted solution]

You can show a negative number in Line 21 with the caption, “Rebate Income Adj.”  The negative number on Line 21 will adjust the income of the reported rebate.  

You can enter a negative income adjustment with the following menu path:

1. Federal Taxes
2. Wages & Income
3. Less Common Income (image attached)
4. Miscellaneous Income
5. Start
6. Other Reportable Income
7. Start
8. Other Taxable Income
9. Description = “Rebate Income Adj”
10. Amount = -$xxx

TurboTax will transfer this to your Form 1040, Line 21, Page 1.

[6760stan]

where can I find menu path you are talking about? I don't see where "federal taxes" is. Is it under one of those file, edit, view, tools, online, help tabs? FYI, I am using home and Biz edition if that matters.