- 10 - deductions attributable to such respective rents, are subject to self-employment tax for the respective years at issue because they constitute net earnings from self-employment under section 1402(a)(1). OPINION Petitioners bear the burden of proving that the determina- tions in the notice that remain at issue are erroneous.11 See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The ultimate dispute between the parties that we must resolve is whether the 1993 claimed rent, the 1994 claimed rent, and the modified 1995 claimed rent, reduced by the deductions attributable to such respective rents, are subject to self- employment tax because they constitute net earnings from self- employment under section 1402(a)(1). As applicable here, section 1402(a)(l) defines the term “net earnings from self-employment” to mean the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business * * * except that in computing such gross income and deductions * * *-- (1) there shall be excluded rentals from real 11Sec. 7491(a) is not applicable in the instant case. That is because respondent issued the notice to petitioners on Jan. 22, 1998, and a fortiori the examination of the years at issue would have commenced before July 23, 1998. See Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 727.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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