H died intestate (without a will) in 1958, leaving a hobby shop as his primary asset. His wife, W, was the administratrix of his estate. She managed and operated the hobby shop as a going concern for two years before selling it in 1960. She received court approved compensation of $60 a week for her work operating the business. This was separate and apart from her regular fees as administratrix of the estate.

The question arose as to whether W’s compensation in operating and managing the hobby shop was includible as net earnings Friday self-employment for social security purposes. This turned on whether this activity constituted carrying on a “trade or business” pursuant to this Social Security Act.

Typically, an administrator or executor of an estate, who acts in that capacity for a friend or family member, but now on a regular basis as part of a profession, is needed engaged in a trade or business for social security purposes.

However, in the instant case, W’s ongoing efforts for two years in managing and operating her deceased husband’s business prior to selling it was regular and continuous and constituted the “carrying on of a trade or business.” Thus, the $60 a week she earned for her services was net earnings from self- employment for purposes of social security.

See Social Security Ruling (SSR) 61-43.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.