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conclusive as to whether the payments were compensation for
services. The payments constitute dividends for U.S. tax
purposes.” We, however, again decline any invitation by
petitioners to engage in a substance over form analysis. For
reasons which parallel those discussed above, we find that
petitioners are not entitled to now advance a position that
conflicts with the paper trail they have created.
Petitioners’ tax returns reflect the payments to DPP as
partnership income, and attached Schedules E in some years
designate the income as nonpassive and in others as passive.
Descriptions of “consulting” or “trade or business--material
participation” are typically included in those years where a
nonpassive classification is shown, and even in a number of years
where the income is marked passive, it is nevertheless labeled
self-employment earnings. Section 1402(a) defines “net earnings
from self-employment” as “the gross income derived by an
individual from any trade or business carried on by such
individual,” less allowable deductions, plus the individual’s
distributive share from any trade or business carried on by a
partnership. However, the statute explicitly provides that “in
computing such gross income and deductions and such distributive
share of partnership ordinary income or loss * * * there shall be
excluded dividends on any share of stock”. Sec. 1402(a), (a)(2).
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