The 1099 seems right to me. 

I would think it would be "other" income.  Does your client own the actual land, or just the rights?  If he owns the actual land, it is possible it would be "rent" of the land.

The company paid in 2021, so they properly added it to the 1099.  But as you are asking, that doesn't go on your client's tax return until 2022.  You could try entering the full amount of the 1099 then "backing out" the 2022 amount as a negative number.  Otherwise, just tell the client to expect an IRS notice, and respond to it.