client recieved 1099 from company that is incorrect

[judyday2009]

client received 1099 from company that is paying for surface rights on solar panel plant land client owns mineral rights for land.  the 1099 classes it as "other income"  Is this correct or is it royalties?

Also the client receives set amount year for 42 years.  2021 is first year received.    received check February 2021 and January 2022.    2022 check was dated 12/27 but received in January 2022. my question is where the best place is to note the discrepancy of the amount for EFile  Thank you 

[TaxGuyBill · Accepted solution]

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.

[judyday2009]

Thank you for your quick reply.  No, he doesn't own the land, so I agree it is other income.   I will record the 1099 as full amount and back out the 2022 amount.  Thank you again.