Trustee income or self employment income?

Jan 11, 2016 23 Replies

I would argue that the nature of what you are doing hasn't changed, only the entity for which you are providing services has changed. Therefore, it's SE income. ========== I would concur. Your normal business is sufficiently close that this would be covered by it.

The only exception I would recognize is if there were a direct personal relationship (e.g. a blood relative) where you would perform the service purely on account of the relationship regardless of what business you were in.

I go back to my original reply to this post:

I would say exactly the opposite. OP is now serving in the capacity of Trustee, which has an entirely different level of responsibility, oversight, and liability than merely providing "financial assistance". Since OP is not in the business of being a Trustee, this is clearly not SE income.

How many bookkeepers or tax preparers get into the trustee business? Why not? Because it is a fundamentally different activity.

Let's say the owner/chef of a restaurant has a waiter that calls in sick. The owner doesn't wait on tables, but this day is needs too because he is short staffed. Are the tips he receives ordinary income? After all, it's an entirely different set of responsibililties and entirely different level of responsibility and oversight.

No it is not. I previously refrained from replying to your ridiculous example. The chef/owner has overall responsibility for his workers, and is responsible for their training and carrying out their duties. (And he is most likely forbidden to take a share of the tips, under stat labor laws, but that is a different issue).

How is this for a better example: The chef owner is asked by his neighboring tenant to give him a hand - he has a plumbing problem that he would like resolved ASAP. So, the chef fixes the plumbing issue and is handed a C note. Part of his ordinary work? A natural extension of his work? No and no.

Anyone who thinks being a trustee is the same as being a bookkeeper should never become a trustee!

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