Instructions For Schedule Se (Form 1040) - 2007 (Page 3 of 4) in pdf

oil and gas properties. If you reduce the

a. Paid after retirement but figured as a

enter “Exempt — Notary” and the amount

amount you enter on Schedule SE, attach

percentage of commissions received from

of your net profit as a notary public from

an explanation.

the paying company before retirement,

Schedule C or Schedule C-EZ on the dotted

line to the left of Schedule SE, line 3. Sub-

b. Renewal commissions, or

If a partner died and the partnership

tract that amount from the total of lines 1

c. Deferred commissions paid after re-

continued, include in SE income the

and 2 and enter the result on line 3.

tirement for sales made before retirement.

deceased’s distributive share of the

3. Income you received as a retired part-

partnership’s ordinary income or loss

However, certain termination payments re-

ner under a written partnership plan that

through the end of the month in which he or

ceived by former insurance salespersons

provides for lifelong periodic retirement

she died. See section 1402(f).

are not included in net earnings from

payments if you had no other interest in the

self-employment (as explained in item 9

partnership and did not perform services

If you were married and both you and

under Income and Losses Not Included in

your spouse were partners in a partnership,

for it during the year.

Net Earnings From Self-Employment on

each of you must pay SE tax on your own

4. Income from real estate rentals if you

this page).

share of the partnership income. Each of

did not receive the income in the course of

7. Income of certain crew members of

you must file a Schedule SE and report the

a trade or business as a real estate dealer.

fishing vessels with crews of normally

partnership income or loss on Schedule E

Report this income on Schedule E.

fewer than 10 people. See chapter 10 of

(Form 1040), Part II, for income tax pur-

5. Income from farm rentals (including

Pub. 334 for details.

poses.

rentals paid in crop shares) if, as landlord,

8. Fees as a state or local government

you did not materially participate in the

SE income belongs to the person who is

employee if you were paid only on a fee

production or management of the produc-

the member of the partnership and cannot

basis and the job was not covered under a

tion of farm products on the land. See chap-

be treated as SE income by the nonmember

federal-state social security coverage

ter 12 of Pub. 225 for details.

spouse, even in community property states.

agreement.

6. Dividends on shares of stock and in-

9. Interest received in the course of any

Share Farming

terest on bonds, notes, etc., if you did not

trade or business, such as interest on notes

receive the income in the course of your

or accounts receivable.

You are considered self-employed if you

trade or business as a dealer in stocks or

produced crops or livestock on someone

10. Fees and other payments received by

securities.

else’s land for a share of the crops or live-

you for services as a director of a corpora-

7. Gain or loss from:

stock produced (or a share of the proceeds

tion.

from the sale of them). This applies even if

11. Recapture amounts under sections

a. The sale or exchange of a capital as-

you paid another person (an agent) to do the

179 and 280F that you included in gross

set;

actual work or management for you. Report

income because the business use of the

b. The sale, exchange, involuntary con-

your net earnings for income tax purposes

property dropped to 50% or less. Do not

version, or other disposition of property un-

on Schedule F (Form 1040) and for SE tax

include amounts you recaptured on the dis-

less the property is stock in trade or other

purposes on Schedule SE. See Pub. 225 for

position of property. See Form 4797.

property that would be includible in inven-

details.

12. Fees you received as a professional

tory, or held primarily for sale to customers

fiduciary. This may also apply to fees paid

in the ordinary course of the business; or

Other Income and Losses

to you as a nonprofessional fiduciary if the

c. Certain transactions in timber, coal,

Included in Net Earnings

fees relate to active participation in the op-

or domestic iron ore.

From Self-Employment

eration of the estate’s business, or the man-

8. Net operating losses from other years.

agement of an estate that required extensive

1. Rental income from a farm if, as land-

9. Termination payments you received

management activities over a long period

lord, you materially participated in the pro-

as a former insurance salesperson if all of

of time.

duction or management of the production

the following conditions are met.

13. Gain or loss from section 1256 con-

of farm products on this land. This income

tracts or related property by an options or

a. The payment was received from an

is farm earnings. To determine whether you

commodities dealer in the normal course of

insurance company because of services you

materially participated in farm manage-

dealing in or trading section 1256 con-

performed as an insurance salesperson for

ment or production, do not consider the ac-

tracts.

the company.

tivities of any agent who acted for you. The

material participation tests are explained in

b. The payment was received after ter-

chapter 12 of Pub. 225.

mination of your agreement to perform

Income and Losses Not

services for the company.

2. Cash or a payment-in-kind from the

Included in Net Earnings

Department of Agriculture for participating

c. You did not perform any services for

From Self-Employment

in a land diversion program.

the company after termination and before

the end of the year in which you received

3. Payments for the use of rooms or

1. Salaries, fees, etc., subject to social

the payment.

other space when you also provided sub-

security or Medicare tax that you received

stantial services. Examples are hotel

d. You entered into a covenant not to

for performing services as an employee, in-

rooms, boarding houses, tourist camps or

compete against the company for at least a

cluding services performed as a public offi-

homes, parking lots, warehouses, and stor-

1-year period beginning on the date of ter-

cial (except as a fee basis government

age garages.

mination.

employee as explained in item 8 under

4. Income from the retail sale of news-

e. The amount of the payment depended

Other Income and Losses Included in Net

papers and magazines if you were age 18 or

primarily on policies sold by or credited to

Earnings From Self-Employment ) or as an

older and kept the profits.

your account during the last year of the

employee or employee representative

agreement, or the extent to which those pol-

5. Income you receive as a direct seller.

under the railroad retirement system.

icies remain in force for some period after

Newspaper carriers or distributors of any

2. Fees received for services performed

termination, or both.

age are direct sellers if certain conditions

as a notary public. If you had no other in-

apply. See chapter 5 of Pub. 334 for details.

come subject to SE tax, enter “Exempt —

f. The amount of the payment did not

6. Amounts received by current or for-

Notary” on Form 1040, line 58; do not file

depend to any extent on length of service or

mer self-employed insurance agents and

Schedule SE. However, if you had other

overall earnings from services performed

salespersons that are:

earnings of $400 or more subject to SE tax,

for the company (regardless of whether eli-

SE-3

Instructions For Schedule Se (Form 1040) - 2007 Page 3

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