1099NEC for residual income

[bobh1]

My wife sold her business 2 yrs ago, but still continues to receive residual income on 1099NEC which generates a schedule C in turbo tax. We have no expenses to post against the Schedule C. In addition I also receive a portion of the residual income from her former business under my SSN.  Can we combine all the residual income received into one schedule C under her SSN or do we need to have a schedule C for each of our SSN's?

2023 Turbotax Premier - MFJ

I guess there is no way to get around the schedule C, but it would be cleaner to have just 1

[DianeW777 · Accepted solution]

No, you cannot combine them based on how the residual income was set up at the time of the sale.  I am assuming this was set up to be paid to each of you equally based on the agreement entered into.  The best way to remedy that is to have a new or update to the agreement where only your wife is paid the residual income with payments continuing for you after her departure. This would required the purchaser to issue the 1099-NEC in only the name of the payee in the future.

There could be other alternatives, however you would need to speak to an attorney about the best way to go about it.  For 2023, you will need to file both Schedule Cs, one for each of you.