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corporation, in the years in issue, and therefore he is not
entitled to basis for any amount of the debt with Frost Bank.
Self-Employment Tax
Petitioner argues that no additional self-employment tax is
due from him for 1987 because petitioner wife had already
reported and paid the maximum self-employment tax for 1987, which
was $5,387.4
There is an upward limit on the amount upon which a Social
Security self-employment tax is assessed, sec. 1402,5 but this in
no way diminishes the obligation to report and pay income tax on
self-employment income, sec. 1401(a). Petitioner wife received
income of $15,000 on account of a referral fee from another
lawyer. It was her self-employment income, not petitioner's.
For income tax purposes, it was reportable by petitioners, and it
is conceded it was not done. On this, respondent's determination
of additional income is sustained. It was not, however, income
of petitioner Don C. Reser for self-employment tax purposes, and
it was error for respondent to determine a deficiency of $1,845
on account of it.
4 The pleadings here are not entirely clear, but the
parties have treated and argued the issue of petitioner's self-
employment tax as properly raised, and we will so treat it.
5 The maximum amount of self-employment income subject to
self-employment tax in 1987 was $43,800.
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