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Section 401(c)(2), which is referred to in section 219 and
section 1.219-1(c)(1), Income Tax Regs., is an elaboration of the
term “earned income” as it applies to net earnings from self-
employment. Petitioners were not engaged in a trade or business
in 2002; they filed no Schedule C with their income tax return;
and they had no net earnings from self-employment in that year.
Accordingly, we conclude that the amount of $4,800
petitioner received in 2002 as distributions from his TSP account
was not compensation or earned income as defined in section
219(f)(1) and section 1.219-1(c)(1), Income Tax Regs. In view of
the broad definition of compensation set forth in the statute and
regulations, it would be superfluous if we interpreted
“compensation” as petitioner requested. See Clarke v.
Commissioner, T.C. Memo. 1999-199 (holding that an IRA
distribution received by the taxpayer was not includable in his
compensation because it did not constitute wages, salaries,
professional fees, or other amounts derived from personal
services actually rendered, but included amounts derived from
earnings from property); cf. Miller v. Commissioner, 77 T.C. 97,
100-102 (1981); King v. Commissioner, T.C. Memo. 1996-231; Estate
of Hall v. Commissioner, T.C. Memo. 1979-342. Therefore, we hold
that the maximum amount of petitioners’ IRA deduction for 2002 is
zero pursuant to section 219(b)(1)(B).
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