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the gross income derived by an individual from any trade or
business carried on by such individual, less any allowable
deductions attributable to such trade or business.
Generally, "rentals from real estate" and the attributable
deductions are excluded in determining net earnings from self-
employment, unless such rentals are received in the course of a
trade or business as a real estate dealer. Sec. 1402(a)(1).
"Rentals from real estate" include generally "Payments for the
use or occupancy of entire private residences or living quarters
in duplex or multiple housing units". Sec. 1.1402(a)-4(c)(1),
Income Tax Regs.
Petitioner received the rental income for the use of
residential units. Such income constitutes rentals from real
estate. Accordingly, that rental income and the corresponding
deductions are excluded from petitioner's net earnings from self-
employment unless we determine that petitioner was engaged in the
trade or business of a real estate dealer and that the rentals
were received in the conduct of that business.
The determination of whether an individual is engaged in the
trade or business of a real estate dealer is made by applying the
principles applied in respect of taxes imposed under sections 1
and 3 of the Code. Sec. 1.1402(a)-4(a), Income Tax Regs. An
individual who is engaged in the business of selling real estate
to customers may be classified as a real estate dealer. Id.
However, an individual who holds real estate for investment or
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