- 4 - On their 1990 and 1991 joint Federal income tax returns, petitioners also claimed loss carry-forward deductions in the respective amounts of $137,047 and $86,367 relating to an investment in a limited partnership. The claimed $137,047 loss carry-forward deduction for 1990 was reflected on line 18 of petitioners’ 1990 joint Federal income tax return as a partnership loss. It was not reflected as a Schedule C business expense deduction. The claimed $86,367 loss carry-forward deduction for 1991 relating to the investment in the limited partnership, however, was reflected on Schedule C of petitioners’ 1991 joint Federal income tax return as a business expense deduction. By claiming the alleged pension plan contributions for 1990 and 1991 and the claimed partnership loss for 1991 as deductions on Schedule C of petitioners' joint Federal income tax returns, petitioners' reported self-employment income was reduced, and no self-employment tax liability was reported as due on petitioners’ 1990 and 1991 joint Federal income tax returns. OPINION Generally, taxpayers are required to pay employment taxes on net earnings from self-employment. Sec. 1401(a). Net earnings from self-employment are defined in section 1402(a) as gross income derived by self-employed individuals from any trade or business less certain enumerated expenses. Contributions toPage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011