Help, how do I report this kind of income?

[Tax Prep by Deb]

My client sold his business, however the new owner does not own the type of license required and must work under my clients license who in turn has to spend a certain amount of hours per quarter with the new owner to keep the license active.  He receives 1000 per month for this purpose.

I feel it should be classified as self-employed income (perhaps consulting fee).  Does anyone have any thoughts?

Thank You in advance!

[BulldogTom]

Either Consulting Income on a 1099NEC or wages on a W2.   If they are in CA, I would go W2 because of AB5, but that horse may have left the barn if you are looking at 2022 tax return.

Tom
Longview, TX

[schirallicpa]

I have a client in the exact same situation.  He had a 1099NEC.  I put in on a Sch C and charged the SE tax.  It's considered a consulting fee and he does not have set hours.