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RS 02505: Variances in and Types of Earnings and Retirement

Effective Dates: 09/13/2004 - Present

TN 9 (05-90)

A. PROCEDURE

Consider:

  • The amount of time devoted to the trade or business. See RS 02505.075.

  • The nature of the services rendered.

  • Comparison of services before and after retirement.

  • The setting in which the services were performed.

B. KINDS OF FACTORS TO CONSIDER

Also consider:

Periods of Vacation, Sickness or Other Illness

  • Consider the beneficiary as not rendering services if idle for those reasons.

Distinguish Ownership from SS

  • Ownership of an operating business is not controlling in establishing retirement.

  • Retirement does not require divestment of ownership.

  • Beneficiary may arrange affairs so as not to require SS in one or more months.

Distinguish Between Earnings and SS

  • There is not necessarily a connection between earnings from SE and SS.

  • Earnings from SE may come after the month services were rendered.

  • Earnings may represent profits based solely on investments or past services.

  • Services may be substantial in a month in which no income is realized.

  • Services may not be substantial in a month of substantial earnings.

  • Consider earnings to the extent that earnings from SE truly reflect the kind and amount of services rendered in a month.

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RS 02501: History
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RS 025: Annual Earnings Test
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RS 02510: Annual Reports
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