My old company got acquired in 2020 and I received payment of 1% of the purchase price (based on the share of the old company) in the year 2020 (90%) and 2021 (10%). I received 1099-NEC from the company who acquired the old one for both years.
In the 2020 tax return, I reported the income as other income from "sporadic activity or hobby" and got audited by the IRS and they fined me $1200 for not claiming it as business income.
In the 2021 tax return, I am trying to report it as business income (sole proprietorship) with schedule C and schedule SE, which ask about company name, business code, accounting method.
My question is what should I answer about the business code, accounting method, company name, etc.
Thanks very much.
