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corporation's shareholder because such items are not derived from
a trade or business carried on by the shareholder. We understand
that we are not bound by the revenue ruling, Stark v.
Commissioner, 86 T.C. 243, 250-251 (1986); however, the fact that
the revenue ruling has remained in effect, unmodified, for 38
years provides a strong commentary on the validity of
respondent's position. During the period the revenue ruling has
been in effect, Congress has amended section 1402 approximately
30 times. If Congress had intended pass-through items from S
corporations to be included in the definition of net earnings
from self-employment, which would obviously be contrary to the
conclusion of the revenue ruling, we expect that one of the many
amendments made to the statute since its enactment would have so
indicated. See generally Helvering v. R.J. Reynolds Tobacco Co.,
306 U.S. 110 (1939).
Furthermore, respondent's position that the pass-through
items were not derived from a trade or business carried on by
petitioner is supported by two firmly established principles of
Federal income taxation, namely: (1) A corporation formed for
legitimate business purposes and its shareholders are separate
entities, Moline Properties, Inc. v. Commissioner, 319 U.S. 436
(1943); and (2) the business of a corporation is separate and
distinct from the business of its shareholders, id.; Deputy v. du
Pont, 308 U.S. 488, 494 (1940); Crook v. Commissioner, 80 T.C.
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