Much of the time a stipend is paid to a student to offset education expenses. However, in your case, it is more likely this definition.
A stipend is a predetermined amount of money that's paid to trainees, interns, and students to help offset expenses. Stipends are often provided to those who are ineligible to receive a regular salary in exchange for the duties they perform. A stipend is generally lower pay than a salary.
Since you will want to recoup your expenses that this amount paid for, you can enter it on Schedule C, as you are doing.
The answers to your questions are:
1) Cash method
2) Yes, you materially participate
3) No, no 1099s
4) 541600 Management, scientific, & technical consulting services is as close as you're going to get
@Teachdog3500
