- 12 - Mr. Dunnegan or Mrs. Dunnegan for purposes of self-employment tax under section 1401. Petitioners attributed 50 percent of the profit and loss from the Schedules C for the fireworks businesses located in Moriarty, Dennings, and Kansas City to Mrs. Dunnegan in 1993. Respondent determined that 100 percent of the net profits and losses from the Schedules C for the fireworks businesses was attributable to Mr. Dunnegan for self-employment tax purposes. Respondent argues that there is no evidence that Mrs. Dunnegan was involved in the management of the businesses or had any significant responsibility for the income-generating activities of the businesses. Section 1401(a) imposes a tax on an individual’s self- employment income. See also sec. 1402(b). Net earnings from self-employment is the gross income derived by an individual from a trade or business carried on by that individual, less certain deductions. See O’Rourke v. Commissioner, T.C. Memo. 1993-603, affd. without published opinion 60 F.3d 834 (9th Cir. 1995). We have previously stated: With respect to individuals who are married, only the spouse carrying on the trade or business will be subject to the self-employment taxes. The question of which spouse carries on the trade or business is a question of fact to be determined on a case-by-case basis. * * *Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011