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To summarize, respondent's position on this issue is
consistent with the literal language of sections 1402 and 1366.
Furthermore, it is supported by the principles expressed in
Moline Properties, Inc. v. Commissioner, supra, and Deputy v. du
Pont, supra, as well as the holdings in Durando v. United States,
supra, and Hansen v. Commissioner, supra. Accordingly, we hold
that petitioner must compute his net earnings from self-
employment, and correspondingly his section 1401 self-employment
tax liabilities for the years in issue, without taking into
account pass-through items from the S corporations.
1992 Carryover Loss
As previously indicated, petitioners have presented neither
authority nor argument in support of their position that the
carryover loss should be included in the computation of
petitioner's 1992 net earnings from self-employment. Respondent
has characterized the item as a net operating loss and argues
that section 1402(a)(4) prohibits petitioners from taking it into
account in computing petitioner's 1992 net earnings from self-
employment. To the extent that the carryover loss, or any
portion of it, constitutes a net operating loss, respondent is
correct. In any event, as we view the matter, our holding with
respect to the treatment of the pass-through items effectively
resolves the dispute between the parties on this issue.
Eliminating the pass-through items from the 1991 computation of
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