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(1) Whether petitioners had a binding settlement
agreement entitling them to deduct a net operating loss
carryover for the years in issue.
(2) Whether petitioners had a 1983 theft loss, or
casualty loss, or trade or business loss that could
properly be carried over to the years in issue and, if
so, then in what amount.
(3) Whether petitioners are liable for a late
filing addition to tax under section 6651(a) for 1987.
(4) Whether petitioners are liable for negligence,
etc., additions to tax under section 6653(a)(1) for
1986, 1987, and 1988 and if so for 1986 or 1987, then
in what amounts.
(5) Whether petitioners are liable for additions
to tax under section 6661 for 1986, 1987, and 1988.
3(...continued)
petitioners reported self-employment tax liabilities for each
year from 1978 through 1982. However, see sec. 1402(a)(4),
which, for purposes of self-employment taxes expressly disallows
net operating loss deductions in computing net earnings from
self-employment. Apart from the disallowance of the claimed
theft/casualty net operating loss deductions, respondent has not
made any adjustments to the amounts, categories, or accounting
methods that petitioners reported on the Schedules C attached to
petitioners’ tax returns for the years in issue. Apart from
these disallowed deductions, the amounts shown on petitioners’
Schedules C would result in a net profit of $24,959 for 1987 and
$29,000 for 1988. See infra table 1. As a result, it appears
that respondent’s determination of self-employment tax
liabilities is correct, regardless of our conclusions as to the
proper treatment of petitioners’ claimed deductions.
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