How do I know if we materially participate on our schdC if it wasn't a business?
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rockbaby929
New Member

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

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!

1 Reply
Carl
Level 15

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

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?

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