Lance A. Landers - Page 5

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          as “the net earnings from self-employment derived by an                     
          individual * * * during any taxable year”.  Section 1402(a)                 
          defines net earnings from self-employment as “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”.  Section                 
          1402(a)(3)(A) excludes from net earnings from self-employment any           
          gain or loss from the sale or exchange of a capital asset.                  
          Section 1402(c) provides that, in the context of self-employment            
          income or net earnings from self-employment, the term “trade or             
          business”, has the same meaning as when used in section 162                 
          (relating to trade or business expenses).                                   
               There is no question that during the taxable year in issue             
          petitioner was in the trade or business of practicing law.  For             
          example, petitioner attached to his 1998 Federal income tax                 
          return, a Schedule C, Profit Or Loss From Business, on which he             
          described his business as “Legal Services”.  On that Schedule C,            
          he reported $5,504 he received from the firm.                               
               Nothing in the record indicates that petitioner was to                 
          receive any payment for “goodwill”.  Rather, the Closing                    
          Statements, signed by Mr. Tolpin, and filed with the Office of              
          Court Administration in New York for each client, state that the            
          amounts paid to petitioner were paid to him as an attorney                  
          “participating in the contingent compensation”.                             

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Last modified: May 25, 2011