@kabbabkkg 

Your answer to this: "Do they claim the income on 2020 return or 2021 when the proceeds are received."

Is Yes and No or Maybe not at all. We have asked many questions, so it should be clear to you we don't have enough info from you. Let's go back to this statement: "I understand that this will be entered on their tax return."

Why do you think this will be needed? Tell us your determination based on the facts and circumstances.