- 9 - K-1 for 1993, as would have been required if it had been a partnership. Sec. 6031(a) and (b). Petitioner did not report any partnership income on his 1993 return. Petitioner offered no documents and called no witnesses to corroborate his testimony that Stan’s Pawn Shop was a partnership in 1993. We are not convinced that Stan’s Pawn Shop was a partnership in 1993. Petitioner contends that he is not liable for tax on $25,218 because the business kept that amount and made no cash distribution to him. We disagree. Stan’s Pawn Shop had net income of $25,218. For tax purposes, a sole proprietorship has no separate legal identity from its proprietor. Jaske v. Commissioner, 823 F.2d 174, 176 (7th Cir. 1987), affg. T.C. Memo. 1986-454. Petitioner is liable for income tax on the $25,218, whether or not Stan’s Pawn Shop distributed that amount in cash to him. Id. We conclude that petitioner is liable for tax on $25,218 of net income from Stan’s Pawn Shop in 1993. D. Whether Petitioner Is Liable for Self-Employment Tax Petitioner contends that he is not liable for self- employment tax on income from Stan’s Pawn Shop because it was a partnership. We disagree for reasons discussed at paragraph C, above. Petitioner contends that he is not liable for self- employment tax because he was not an employee of Stan’s Pawn ShopPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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