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expenses for 1995 therefore total $17,340. Petitioners’ total
yearly expenses for 1995 equal $48,382.44.
Respondent then added in petitioners’ “one time” personal
expenditures (i.e., the rent deposit, the Mercedes purchase, the
Astro Minivan payment, the appliance purchases, and the Acura
purchase). These expenses total $53,476.04. Thus, petitioners’
total personal expenditures for 1995 equal $101,858.48.
Next, respondent added the cash ($302,515.25), money orders
($15,750), and cashier's checks ($105,175) seized from Mr. Key in
November 1995. This amount totals $423,440.25. Responded added
this amount to petitioners’ total personal expenditures for 1995
($101,858.48) bringing the final total to $525,298.73.
Subtracting petitioners’ reported adjusted gross income
($341,184) from the amount calculated via the net worth method
results in unreported income of $184,114.73. Based upon the
foregoing, we conclude that in 1995 petitioners had $184,114.73
of unreported income from The Ultimate Comeback.
II. Self-Employment Tax
Respondent argues that in 1995 petitioners had self-
employment income based on petitioners’ reported and unreported
income from The Ultimate Comeback, and petitioners owe self-
employment tax based on that income.
Section 1401 imposes self-employment tax on self-employment
income. Section 1402 defines net earnings from self-employment
as the gross income derived by an individual from the carrying on
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