1099 - Box 7 or Box 3?

2 Replies

Last year we completed a flip as a profit sharing deal with a contractor. We purchased and sold the property, paid holding costs, and paid for materials. The contractor provided the sweat equity. After sale, we cut a check and then reported the amount on a 1099 Box 7. Is this the correct place to report proceeds from a partnership, where there is no guaranteed income? Contractor requests we amend to a 1099 Box 3.

@Greg Widdicombe

You're correct. Box 7.

The contractor requests Box 3 because that box can help him escape the self-employment tax, and he wants to game the system. Deny.