This is the first answer that actually addressed the issue. Thank You!

My concern with adding this as a non-taxable income is that when doing taxes next year, my balance sheet in turbo tax will not be in sync due to this income not being accounted for. It seems it would make more sense to roll this into an account similar to owner's capital. This way it is treated like a cash investment into the business as oppose to some sort of income. Thoughts on this?