- 2 - After a concession by petitioners, the only issue which this Court must decide is whether petitioners are liable for self-employment tax under section 1401 on a distribution received from a partnership. Some of the facts in this case have been stipulated and are so found. Petitioners resided in Coronado, California, at the time they filed their petition. In 1995, petitioners both worked in sales. Matthew Norwood (petitioner) sold yachts. Linda Kramer was employed by Lasorda Staff Leasing, LLC and by Designed Administrative Resources Tech. During 1995, petitioner was also a general partner of Gallant Medical Supply (Gallant), a partnership. Petitioner's percentage of profit and loss sharing for Gallant was 50.95 percent. Additionally, petitioner owned 50.95 percent of the capital of Gallant. Petitioner started Gallant a number of years ago. He had worked at Gallant full time, but when the staff could operate the business without him, petitioner stopped working there. During 1995, petitioner spent approximately 41 hours on partnership matters. He conducted periodic walkthroughs of Gallant and was consulted on major decisions of the firm. In 1995, petitioner received $71,194 as his distributive share of Gallant's income. Petitioners correctly included the $71,194 distribution as taxable income on Schedule E, Supplemental Income and Loss, ofPage: Previous 1 2 3 4 Next
Last modified: May 25, 2011