Van owns residential rental property. His tenants pay rent through Venmo. In addition, he has a weekly get$-$together with friends where they try new restaurants. Whoever picks the restaurant pays the tab, and the others reimburse them through Venmo.

For $2022,$ Van received Form $1099-$K from Venmo for all these transactions. How will his tax preparer handle the form?

Since it was all reported together, the full amount from the Form $1099-$K should be reported on Schedule E$,$ and Van can subtract the meal reimbursements there as a $100\%$ deduction.

Since it was all reported together but only part of it was rental income, the Form $1099-$K doesn't get entered. Van should just report the rental income on Schedule E$.$

Using the Merchant Payments input screen, the preparer will enter the Form $1099-$K$.$ The rental income carries to Schedule E$.$ The reimbursement amounts are entered as nontaxable.

Because Van made payments for meals as well as receiving them, his tax preparer should subtract all meal payments in and out, then apply the rest to Schedule E through the Merchant Payments input screen.