Ann Jorgensen - Page 10

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          who teach them are reviewed and approved by the appropriate                 
          academic department on the University of California, Berkeley               
          campus, and the Committee on Courses of the Academic Senate.                
          Although petitioner did not complete the credit requirements, we            
          are satisfied that her participation in the courses was not                 
          within the ambit of section 274(m)(2).                                      
               Having determined that the U.C. Extension courses were                 
          educational activities beyond mere travel, we nevertheless must             
          determine whether petitioner's expenses meet the requirements for           
          deductibility under section 162.  Expenditures made by a taxpayer           
          for education are deductible, with certain exceptions not                   
          relevant here,2 if the education either:  (1) Maintains or                  
          improves skills required in an individual's employment or other             
          trade or business; or (2) meets the express requirements of the             
          individual's employer, or meets the requirements of applicable              
          law or regulations, imposed as a condition to the retention of              
          employment, status, or rate of compensation.  See sec. 1.162-               
          5(a), Income Tax Regs.  Petitioner's employer did not expressly             

               2  The parties agree that the U.C. Extension courses do not            
          meet the minimum educational requirements of petitioner's                   
          employment.  They further agree that the courses do not qualify             
          petitioner for a new trade or business.  Thus, deductions                   
          associated with the courses are not prohibited under sec. 1.162-            
          5(b), Income Tax Regs.                                                      

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