Gerald L. and Joy M. Zeidler - Page 12

                                       - 12 -                                         

          individual for education which is part of a program of study                
          being pursued by him which will lead to qualifying him in a new             
          trade or business."  Sec. 1.162-5(b)(3), Income Tax Regs.                   
               Under section 1.162-5(b)(3), Income Tax Regs., if a taxpayer           
          is pursuing a course of educational study that qualifies the                
          taxpayer for a new trade or business, the expenditures are not              
          deductible whether the studies are required by the employer,                
          whether the taxpayer does not intend to enter a new field or                
          endeavor, and even though the taxpayer's duties are not                     
          significantly different after the education from what they had              
          been before the education.  Robinson v. Commissioner, 78 T.C.               
          550, 556-557 (1982); Bodley v. Commissioner, 56 T.C. 1357, 1360             
          (1971); Schwerm v. Commissioner, T.C. Memo. 1986-16.                        
               The question of whether an educational expenditure qualifies           
          a taxpayer for a new trade or business requires a "commonsense              
          approach".  Reisinger v. Commissioner, 71 T.C. 568, 574 (1979).             
          "If the education qualifies the taxpayer to perform significantly           
          different tasks and activities than he or she could perform prior           
          to the education, then the education qualifies him or her for a             
          new trade or business."  Browne v. Commissioner, 73 T.C. 723, 726           
          (1980) (citing Diaz v. Commissioner, 70 T.C. 1067, 1074 (1978),             
          affd. without published opinion 607 F.2d 995 (2d Cir. 1979));               
          Glenn v. Commissioner, 62 T.C. 270, 275 (1974).  The taxpayer's             
          subjective purpose in pursuing the education is irrelevant, and             

Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011