- 49 -
1992
Gross receipts
Notice of Deficiency $91,972
Star Bank miscellaneous (886)
Total 91,086
Purchases
Notice of Deficiency 58,971
Additional 10,313
Dishonored checks (18,130)
Total 51,154
Omitted Income
Gross receipts 91,086
Purchases (51,154)
Rent (5,000)
Total 34,932
Issue 2. Whether Petitioners Are Liable for Self-Employment Tax
on the Net Income From the Sports Memorabilia Activity
Section 1401 imposes a tax on a taxpayer's self-employment
income. Self-employment income includes the net earnings from
self-employment derived by an individual during the taxable year.
See sec. 1402(b). Net earnings from self-employment means the
gross income derived by an individual from any trade or business
carried on by the individual, less allowable deductions
attributable to the trade or business, plus certain items not
relevant here. See sec. 1402(a). With certain exceptions not
here applicable, the term "trade or business" for purposes of the
self-employment tax generally has the same meaning as used for
purposes of section 162. Sec. 1402(c). Thus, to be engaged in a
trade or business within the meaning of section 1402(a), an
individual must be involved in an activity with continuity and
regularity, and the primary purpose for engaging in the activity
must be for income and profit. See Commissioner v. Groetzinger,
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