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earnings were not "net earnings from self-employment" within the
meaning of section 1402(a) and, therefore, have not met their
burden of proof. Rule 142(a). Accordingly, we sustain
respondent's determination of the self-employment tax in the
amount of $1,240.
Finally, in the notice of deficiency, after including
unreported income in the amount of $60,552 in petitioners' gross
income and allowing a self-employment tax deduction in the amount
of $620, respondent made computational adjustments to the amounts
allowed for deductions for passive activity losses from rental
real estate and for itemized deductions. As a result, respondent
determined that petitioners' rental loss should be disallowed to
the extent of $23,576 and that petitioners' itemized deductions
should be disallowed to the extent of $1,372.
As petitioners conceded that they have additional income in
the amount of $60,552 and petitioners are entitled to a self-
employment tax deduction in the amount of $620 pursuant to
section 164(f)(1), respondent's computational adjustments to the
amounts allowed for deductions for passive activity losses from
rental real estate and for itemized deductions must be sustained.
We have considered all of petitioners' remaining arguments
and find them to be without merit.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011