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percent of the stock of each of the others. Two of the S
corporations owned and operated restaurants. The third owned and
operated a 30-room motel. Through a sole proprietorship, Ding
Trading, petitioner, or petitioners, provided various services to
the S corporations.
Petitioners devoted substantial time to the business
activities of the S corporations during the years in issue. They
were actively involved in the conduct of those businesses on a
daily basis, as summarized by petitioner, "[doing] everything"
that needed to be done. Petitioners considered themselves to be
independent contractors who provided services to the S
corporations on a contractual basis through Ding Trading. The S
corporations paid consulting fees to Ding Trading and, along with
other income, these fees were reported on Schedules C included
with petitioners' 1991 and 1992 Federal income tax returns.
In computing petitioner's self-employment tax liabilities
for the years in issue, petitioners took into account net profits
and losses from petitioner's sole proprietorships (including Ding
Trading), a partnership loss, and pass-through items from the S
corporations. For 1991, because of the amount of the losses from
two of the S corporations, petitioners reported that petitioner
had negative net earnings from self-employment and no self-
employment tax liability. For 1992, petitioners treated the
excess of 1991 losses over 1991 income as some form of carryover
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