- 10 - and did not receive Forms W-2 or Forms 1099. He testified that he went to Stan’s Pawn Shop from time to time to oversee its operations and did not work a specific schedule. He contends that these facts show that he was not employed or self-employed. We disagree. Taxpayers who derive net earnings from self-employment of $400 or more are liable for self-employment tax. Sec. 6017. Self-employment income consists of the net earnings from a trade or business carried on by an individual through a sole proprietorship. Sec. 1.1401-1(c), Income Tax Regs.; see also Parrish v. Commissioner, T.C. Memo. 1997-474, affd. 168 F.3d 1098 (3d Cir. 1999). Petitioner must take into account all of the income and deductions of his sole proprietorship in computing his 1993 self-employment tax. Sec. 1402(a)(5)(A). The fact that he received no wages from Stan’s Pawn Shop and did not work regularly at Stan’s Pawn Shop does not affect whether he derived income from his business because he and Stan’s Pawn Shop are not separate legal entities for tax purposes. Jaske v. Commissioner, supra. Thus, the net income that he derived from Stan’s Pawn Shop is subject to self-employment tax. Sec. 1402. We conclude that petitioner is liable for self-employment tax on the $25,218 that he reported on his 1993 tax return as net income of Stan’s Pawn Shop in 1993.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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