- 8 -
truck to be repairable. They kept the truck and title thereto,
intending to repair it, but it was not repaired or further used
after the accident. The truck was not scrapped or used as a
source for parts. The truck was not transferred to a scrap
account, but instead kept on the depreciation schedule of
Ruckman, Inc., which took depreciation expenses of $12,285 in
each of the years 1990 and 1991 with respect to the truck.
OPINION
1. Dispatch Income
Respondent determined that amounts paid by Bennett Logging
for dispatch services in 1989 and 1990 were incorrectly reported
as income by Ruckman, Inc., for those years and instead were
required to be reported on petitioners' returns as self-
employment income of Mrs. Ruckman, subject to self-employment
tax. Petitioners contend that these amounts were properly
reported as Ruckman, Inc.'s income.4 Similarly, respondent
determined that $18,063 paid by Happy Trucking in 1991 for
dispatch services was unreported and should have been reported on
petitioners' returns as self-employment income of Mrs. Ruckman.
Petitioners concede that $18,063 in income was received but not
reported in 1991, but contend that this amount should be reported
as income of Ruckman, Inc.
4The parties appear to be in agreement that these amounts,
if income of Ruckman, Inc., would not be subject to self-
employment tax under sec. 1401 when passed through to
petitioners. Cf. Ding v. Commissioner, T.C. Memo. 1997-435.
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