Pool v. Commissioner

MEMORANDUM FINDINGS OF FACT AND OPINION

WILES, Judge: Respondent determined a deficiency of $275 in petitioners' 1973 income tax (docket No. 982-75) and a deficiency of $388.40 in petitioner Leslie Pool's 1974 income tax (docket No. 2081-76). The sole issue is whether petitioners are liable for the self-employment tax, pursuant to section 1401. ¹

FINDINGS OF FACT

Some facts were stipulated and are found accordingly.

Leslie and Willie J. Pool were living in Monahans, Texas, when they filed their 1973 income tax return and when they filed their petition in docket No. 982-75. Leslie Pool was living in Monahans, Texas, when he filed his 1974 income tax return and when he filed his petition in docket No. 2081-76.

Petitioners filed a joint income tax return for 1973 on which they reported net income of $3,440 ² from Mr. Pool's television repair business. Petitioners did not report any self-employment tax liability for 1973.

*312 Leslie Pool filed an income tax return for 1974 as a married person filing separately. He reported net income of $3,600 from his television repair business, but did not report any self-employment tax liability for 1974.

OPINION

Section 1401 imposes a tax on self-employment income. Section 1402(a) defines "net earnings from self-employment" as "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 1.1402(c)-1, Income Tax Regs., states that "'trade or business,' for the purpose of the tax on self-employment income, shall have the same meaning as when used in section 162."

Mr. Pool's television repair business is clearly a trade or business carried on by an individual, and the net income from such business is included in the definition of net earnings from self-employment. Petitioners are liable for the self-employment tax despite their protest that the social security system is going bankrupt.

Decision will be entered for the respondent in docket No. 982-75.

Decision will be entered under Rule 155 in docket No. 2081-76*313 .