A retired in 1960 at age 62, the earliest date she could receive social security retirement benefits. At issue was whether her earnings in 1958 from caring for her invalid father-in-law, B, in her own house. She cared for him from 1952 throughout 1957 when he died, providing nursing and other personal services. She paid for his medicines out of her own pocket. She had never previously engaged in such activities for profit. There was no agreement that she would be reimbursed or compensated for her activities. She operated a farm for profit.

When B dies, it was discovered he left an estate of several thousand dollars. A claimed she was entitled to compensation for caring for B for five years. The family agreed, and she was paid $1,000 out of the estate.

At issue was whether B’s $1000 compensation was net earnings from self-employment, includible as income for social security purposes s. It was held that it was not. B had cared for a close family member with no expectation of profit. She was not in the business of providing nursing or similar personal services. Therefore, she was not engaged in a trade or business pursuant to section 162 of the Internal Revenue Code, the same test as used by social security for determining net income from self-employment.

See Social Security Ruling (SSR) 61-44.

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.