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from self-employment” is defined as “the gross income derived by
an individual from any trade or business carried on by such
individual, less the deductions * * * which are attributable to
such trade or business”. Sec. 1402(a).
Respondent determined self-employment taxes on the basis of
petitioner’s income from his real estate business. The
applicable percentage for each of the tax years at issue was
applied to the maximum amount of self-employment earnings subject
to self-employment tax: $39,600 in 1985, $42,000 in 1986,
$43,800 in 1987, and $45,000 in 1988. See sec. 1402(b)(1).
Respondent determined petitioner’s self-employment tax liability
to be $4,67373 for 1985, $5,16674 for 1986, $5,38775 for 1987, and
$5,85976 for 1988.
Petitioner was engaged in the trade or business of buying
and selling real estate during the years at issue. He does not
contest on brief that his earnings from that business are subject
to self-employment taxes. Therefore, we sustain respondent’s
73Self-employment tax ($4,673) = Maximum amount subject to
self-employment tax ($39,600) x Applicable percentage (.118).
74Self-employment tax ($5,166) = Maximum amount subject to
self-employment tax ($42,000) x Applicable percentage (.123).
75Self-employment tax ($5,387) = Maximum amount subject to
self-employment tax ($43,800) x Applicable percentage (.123).
76Self-employment tax ($5,859) = Maximum amount subject to
self-employment tax ($45,000) x Applicable percentage (.1302).
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