I started a new business in 2010 selling tires and repairing vehicles. I took on a job to repair a blown engine in customer's skid steer loader. I found him a new replacement engine on ebay and told him to just give me what the engine cost. He made the check out to me personally and not my business. I deposited the check into my business account. I then completed the engine swap running the transaction through my business and invoiced him accordingly. He again made the check out to me personally and I again deposited it in my business account.

I just received a 1099-misc from him for the amount of the entire job. Is this the correct use of a 1099? How do I handle this form? The total amount of the 1099 is 7100.00 but of this amount, only 1500.00 is labor, the rest is the cost of the engine and related parts and sales tax.

Thanks in advance