- 5 - distributed, of income or loss (as described in section 702(a)(8)) from any trade or business carried on by a partnership in which the individual is a partner. Sec. 1402(a). The statute makes a distinction between general and limited partners. Other than certain guaranteed payments (described in section 707(c)) made to a limited partner by a partnership, a limited partner's distributive share of the partnership's items of income or loss is excluded from the definition of net earnings from self- employment. Sec. 1402(a)(13). Briefly stated, income derived by an individual from carrying on a trade or business through a sole proprietorship or as a partner (other than a limited partner) in a partnership generally constitutes net earnings from self- employment. Sec. 1.1402(c)-1, Income Tax Regs. The parties agree that the items attributable to petitioner's sole proprietorships and the partnership were properly included in the computation of petitioner's net earnings from self-employment for each year. They disagree over the treatment of the pass-through items from the S corporations and, although petitioners presented no argument on the point, apparently disagree over the treatment of the carryover loss with respect to 1992. S Corporation Pass-Through Items Neither section 1402, which provides the definition of net earnings from self-employment, nor the regulations promulgatedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011