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payments received by petitioner pursuant to the extended
fellowship period commencing on June 20, 1990, do not meet the
requirements of the transitional rule noted above, and section
117 as amended by TRA 1986 applies to those amounts.
Next, we must address respondent's claim that petitioner was
not a candidate for a degree during the years in issue. While
petitioner was enrolled in physics courses at CUNY, respondent
argues that those classes were taken solely to enable him to
prepare for and pass the Ph.D. qualifying exam, and that until
petitioner did so, he was not a candidate for a degree within the
meaning of section 117. Petitioner explained at trial, however,
that prospective Ph.D. candidates at CUNY who have not passed the
qualifying exam are required to enroll in a master's degree
program as a precursor to, and in preparation for, eventual
enrollment as a "formal" Ph.D. candidate (upon completing the
qualifying exam). Petitioner introduced into evidence a letter
from the CUNY registrar's office corroborating his claim that he
was enrolled in a master's degree program in physics from
September 1, 1988, to June 1, 1992. Respondent, on the other
hand, argues that petitioner had previously received a master's
degree in physics from Howard University and therefore could not
have been enrolled for that same degree at CUNY.
Section 1.117-3(e), Income Tax Regs., states that a
candidate for a degree is an individual undergraduate or graduate
studying or conducting research to meet the requirements for a
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