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to hide this by specious deductions on her Schedule C-1. On this
record, we are satisfied that petitioner reported all of her
income, subject to correction for the $258 mistake in her favor.
Accordingly, we sustain petitioner on this issue.
Petitioner's self-employment tax was increased by
respondent. A taxpayer is liable for self-employment tax on net
earnings pursuant to section 1401. Net earnings are defined as
"the gross income derived by an individual from any trade or
business carried on by such individual," less the allowable
deductions pertaining to such trade or business. Sec. 1402(a).
It is not disputed that petitioner is self-employed in both her
businesses. Accordingly, petitioner is liable for self-
employment taxes to the extent that petitioner has net earnings
under our findings. The deduction of one-half of the self-
employment tax will be a computational adjustment. Sec. 164(f).
The parties stipulated that the gross receipts in the Union
Bank account were $29,056, which was $258 less than the gross
receipts of $29,314 reported on the Schedule C-1. We conclude
that the gross receipts for the Schedule C-1 business were
$29,056. When we deduct the expenses stipulated as substantiated
by petitioner of $6,274, petitioner had net profit of $22,782 for
her Schedule C-1 paralegal business. This is in sharp contrast
to the net profit of $12,201 petitioner reported on the original
Schedule C-1.
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