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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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