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expenses are such that they are required to be capitalized.
Petitioner has not provided further substantiation of those
items, and he has not provided evidence which would permit us to
conclude that those particular expenses were of frequent and
common occurrence in the petitioner’s purported business
activity. With that being said, petitioner has not met his
burden of substantiation or proved his entitlement to current
deductions under section 162(a). We hold that the claimed
expenses are not allowable as ordinary and necessary business
deductions.
G. Self-employment Tax
FINDINGS OF FACT
Petitioner reported self-employment tax of $930, $509,
$5,387, and $2,371, on his Forms 1040 for 1985, 1986, 1987, and
1988, respectively. Those amounts were computed on the basis of
petitioner’s net profits, which he reported from his real estate
business: Net profits of $7,882, $4,138, $44,219, and $18,208,
for 1985, 1986, 1987, and 1988, respectively.
OPINION
Section 1401 imposes a percentage tax on self-employment
income of every individual. See Baker v. Commissioner, T.C.
Memo. 2001-283. Self-employment income is defined as “the net
earnings from self-employment derived by an individual * * *
during any taxable year”. Sec. 1402(b). The term “net earnings
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