Yardley CPA Posted February 8, 2014 Report Share Posted February 8, 2014 I have a client who is a lawyer and is employed as a "consultant" at a law firm. She receives a 1099 from the firm. In addition, she received a referral fee from a law firm she sent a friend to. The firm took up the friends case and it resulted in an award of $30,000. My client received a referral fee from the firm for $3,333. How would this be handled on the return? Would it be included on Line 21 or should I include it on her Schedule C Consultant Business? Quote Link to comment Share on other sites More sharing options...
joelgilb Posted February 8, 2014 Report Share Posted February 8, 2014 Referral Fees paid to attorneys are a normal part of the practice and are ordinary income.If the attorney is a Sole Proprietor, those fees are normal part of the Schedule C Business income and should be included on the Schedule C Gross Receipts line. 3 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 8, 2014 Report Share Posted February 8, 2014 I agree. Perfectly normal part of the business. For IRS matching reasons, on line 1 of the C, the 1099 would be listed on line 2 of the worksheet. 1 Quote Link to comment Share on other sites More sharing options...
jshtax Posted February 8, 2014 Report Share Posted February 8, 2014 regular ordinary income Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 8, 2014 Report Share Posted February 8, 2014 regular ordinary income I agree ....line 21....it's an award Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 8, 2014 Report Share Posted February 8, 2014 I agree ....line 21....it's an award No, this does not go on line 21. Read Joelgilb's post above, and because the OP said client is a lawyer and received a referral fee, not an award. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 9, 2014 Report Share Posted February 9, 2014 Ordinary income. Schedule C. Everyone is overthinking this one. He received the money for his services as an attorney. Quote Link to comment Share on other sites More sharing options...
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