@BB_0
Here's my opinion, but I'm not familiar with this treatment of royalty income so I'm no expert on how to report it.
What you outlined does seem like the right way to enter it. What probably makes it feel awkward is that it's not really a sale of an asset. You're forcing it onto a form that's not designed for it. But that's the only way to report it as capital gain. Yes, you can and should make four entries, each with the actual date that the payment was made.
How would you enter it as a 1099-DIV? Do you mean you would put it in box 2a? I wouldn't do that. It wouldn't look right, and it gives you no opportunity to enter a description.
