Curtis and Marie Bennett - Page 2




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          Curtis Bennett and Marie Bennett                                            
                          Year                Deficiency                              
                          1995                  $4,194                                
                          1996                  3,492                                 

          Gerhard W. Schmitz and Betty J. Schmitz                                     
                          Year                Deficiency                              
                          1995                  $4,226                                
                          1996                  4,734                                 

               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for the years in issue, and             
          all Rule references are to the Tax Court Rules of Practice and              
          Procedure.                                                                  
               The issue for decision is whether partnership activity                 
          constituted a trade or business, triggering self-employment tax             
          liability on partnership income for the partners of the                     
          partnership.                                                                

                                     Background                                       
               The facts of these cases were submitted fully stipulated               
          under Rule 122, and are so found.                                           
               At the time the petitions were filed, petitioners Curtis and           
          Marie Bennett resided in Gering, Nebraska, and petitioners                  
          Gerhard W. and Betty J. Schmitz resided in Scottsbluff, Nebraska            
          (hereinafter references to petitioners are generally to Curtis              
          Bennett and Gerhard Schmitz).                                               
               On January 1, 1991, petitioners, as equal partners,                    
          organized Lucky Keno (Lucky) as a general partnership to                    





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