At this point, I would lean toward doing the Dividends, as I don't think this person would relish the idea of getting involved in payroll taxes, knowing that she may never have another sale. If I were to go that way, would I do 1099s for 2021 AND 2022? If I do one for 2021, do the remaining funds become retained earnings?

To say the least, this is a difficult client--maybe not the return, but the person. I haven't done corporate returns on a regular basis and finding someone else to do it has been an impossible task this morning.