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Petitioner asserts that the cost of the Big League Sales
Course and associated expenditures were deductible as ordinary
and necessary business expenses pursuant to section 162.
Respondent contends that the course cost and the associated
expenses were personal expenses and not ordinary and necessary
business expenses and, therefore, were not deductible pursuant to
section 262.
Section 162 allows a deduction for "all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business". Certain expenditures made by
an individual for education are deductible as ordinary and
necessary business expenses if the expenditure:
(1) Maintains or improves skills required by the
individual in his employment or other trade or
business, or
(2) Meets the express requirements of the
individual's employer, or other requirements of
applicable law or regulations, imposed as a condition
to the retention by the individual of an established
employment relationship, status, or rate of
compensation. [Sec. 1.162-5(a), Income Tax Regs.]
Petitioner's participation in a sales course may have maintained
or improved the skills required of him in his occupation as a
salesman. The expenditure for such coursework, however, must
still be ordinary and necessary in order to be deductible. Sec.
162(a).
"Ordinary" has been defined as that which is "normal, usual,
or customary" in the taxpayer's particular trade or business.
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Last modified: May 25, 2011