SSR 61-43. ADMINISTRATOR OR EXECUTOR -- OPERATION OF BUSINESS AMONG ASSETS OF ESTATE

H died intestate in 1958. He was survived by a daughter and a widow, W,

who was appointed administratrix of his estate. Prior to his death H owned

and operated a retail hobby store, which was the principle asset of the

estate. W, as administratrix, continued to operate the store, and as

remuneration for her services she received, with the approval of the

court, $60 a week from the store's receipts. These payments were apart

from her regular fees approved by the court for her usual activities as

administratrix. W made efforts to sell the store and purchased stock to

keep the business going so that its sales value as a going business would

not be diminished. W operated the store from 1958 through 1960, at which

time the store was sold and the estate settled.

The questions to be resolved are whether W's services in operating the

store constitute carrying on a "trade or business" within the meaning of

section 211(c) of the Social Security Act and, consequently, whether the

remuneration received by her for those services may be included in

computing her net earnings from self-employment for social security

purposes.

Section 211 of the Social Security Act provides in pertinent part:

Whether or not a person is engaged in a trade or business is dependent

upon all the facts and circumstances in the particular case. As a general

rule, when a person is regularly engaged in an occupation or profession

for profit and, as to such occupation or profession, is not an employee or

not otherwise excluded from the self-employment provisions of the Act,

such a person is engaged in a trade or business within the meaning of

section 211(c).

dependent

upon all the facts and circumstances in the particular case. As a general

rule, when a person is regularly engaged in an occupation or profession

for profit and, as to such occupation or profession, is not an employee or

not otherwise excluded from the self-employment provisions of the Act,

such a person is engaged in a trade or business within the meaning of

section 211(c).

A professional fiduciary or executor who regularly engages in fiduciary

services and handles a number of estates is engaged in a trade or

business. A nonprofessional fiduciary (for example, a person who serves as

executor or administrator in isolated instances, and then only as personal

representative for the estate of a deceased friend or relative) generally

is not engaged in a trade or business. A nonprofessional fiduciary who

actually carries on a trade or business in connection with the

administration of an estate, such as operating a store which is part of

the estate, may have income includible as net earnings from

self-employment if the trade or business is an asset of the estate and the

executor actively participates in the operation of such trade or business.

In this event, only the fees approved or allowed as compensation for

services in operating the trade or business, as distinguished from the

normal compensation payable to an executor, are includible in computing

net earnings from self-employment.

In the present case W's activities in operating the store for the years

1958 through 1960 constitute the carrying on of a "trade or business"

within the meaning of section 211(c) of the Act under the criteria above.

There was a trade or business among the assets of H's estate; W did

actively participate in its operation; and her remuneration for this

activity was separate and apart from her regular fees as an

administratrix.

erating the store for the years

1958 through 1960 constitute the carrying on of a "trade or business"

within the meaning of section 211(c) of the Act under the criteria above.

There was a trade or business among the assets of H's estate; W did

actively participate in its operation; and her remuneration for this

activity was separate and apart from her regular fees as an

administratrix.

Accordingly, it is held that W's services in operating the hobby

store during the years 1958 through 1960 constitute carrying on a "trade

or business" within the meaning of section 211(c) of the Act and her

remuneration for such services is includible in computing her net earnings

from self- employment for those years.