Nancy L. and Gerald L. Harper - Page 14




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          employment tax on that income and entitled to a corresponding               
          deduction for one-half of the self-employment tax to be paid.               
               Accordingly, and based on the foregoing facts and                      
          discussion, we hold that petitioners failed to report nonemployee           
          compensation in the amount of $1,125 on their 2003 Federal income           
          tax return, are liable for self-employment tax on that amount,              
          and are entitled to a corresponding deduction for one-half of the           
          self-employment tax to be paid.                                             

                                                  Decision will be entered            
                                              for respondent.                         





























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