How do I know if we materially participate on our schdC if it wasn't a business?

[rockbaby929]

Husband is an optometrist/optometry professor.  He taught a class at a convention.  They pd him by check and we received a 1099misc.  Turbotax put that information onto a schdC.  It wants to know the business code (I'm guessing 61100 or 999999?), the accounting method for his business (cash or other?) and if he materially participated.  He doesn't have a business.  He has taught a class at this convention before, but I don't remember answering some of these questions before and we've always received and filed a 1099misc.  I researched materially participated...it doesn't look like yes or no.  I'm so confused!  Thank you so much for your time!

[Carl]

As far as the IRS is concerned, income reported in box 7 of a 1099-MISC is self-employment income earned by the recipient while "in business" for themselves. Also, it's important to clarify here that it's not "our" business. It's "his" business. Only his SSN is on the 1099-MISC.

"He doesn't have a business. "

Just to clarify here, if the income is reported in box  7 of the 1099-MISC, then regardless of what you and I say, he did have a business in 2017.

"if he materially participated"

If he was the one that performed physical labor (such as lecturing or teaching) then there's no question that he did "in fact" materially participate.

"He has taught a class at this convention before"

That would provide further justification in the IRS's favor that he is self-employed since he has been paid for teaching at this convention on a recurring basis. Is the income reported in some box other than box 7 par chance?

[sebs54]

It seems this is an older post.  However, I believe I have a similar situation excepting that my income is not reported in box 7 but rather box 3 on a 1099-MISC form. 

I have received the income for participating in a year long training program.  By being enrolled in this program I receive the major portion of this extra income essentially as a payment for tenure.  It is an incentive to stay with my current employer.  A small portion of this total is also payment for online training that has taken significantly less than 500 hours to complete.  I am not sure if I "materially participated". 

Any help is greatly appreciated.  

[ThomasM125]

Material participation means you were spending time do something to generate the income. It appears you were receiving training, so that would indicate that you did materially participate in the activity. This is in contrast to someone that was a silent investor in a business, for instance, one who maybe put up money but was not involved in the running of the business.

The other issue of whether or not you were self-employed would depend on how you answered three question you will see after you enter the Form 1099-MISC. You will be asked if the activity was associated with you main job, whether you only received the compensation in the current year and whether you had a profit motive to receive the compensation. If you answer yes to any of those questions, then your income will be treated as self-employment income in TurboTax and you will see the question regarding material participation.