Gerald P. and Abbe L. Keane - Page 9

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          deductible only if they are incurred to maintain or improve the             
          taxpayer's employment or to meet the express requirements of the            
          job.  Sec. 1.162-5(a), Income Tax Regs.                                     
               Educational expenses incurred to allow the taxpayer to meet            
          the minimum educational requirements for his job qualification              
          are considered personal expenses and are not deductible.  Taubman           
          v. Commissioner, 60 T.C. 814, 819 (1973) (law school expenses not           
          deductible when legal education prepared taxpayer for new                   
          career); sec. 1.162-5(b), Income Tax Regs.  In this case,                   
          petitioner is repaying money he received as a tuition scholarship           
          while studying for his medical degree at Brown.  A medical degree           
          is a necessary step to practice medicine as a doctor.  Repayment            
          of these funds under the NHSC contract is therefore a personal              
          expense because the funds were originally expended to enable him            
          to enter into a new profession.  Petitioner's interest payments             
          are personal expenditures and not incurred in carrying on a trade           
          or business.  Deductions for them are disallowed under section              
          162.                                                                        
          Section 163 - Interest Deduction                                            
               Petitioner alternatively argues that his interest payments             
          are deductible under section 163.  Generally, section 163                   
          provides that interest on indebtedness is deductible by the                 
          taxpayer in the year it is paid.  Sec. 163(a).  However,                    
          substantial limitations are placed on this general rule which may           





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