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In April 1995, petitioner was awarded a specialized associate
degree in business from the academy. At the time, he held no
other undergraduate degrees.
During 1995, petitioner paid tuition costs and related
expenses of $9,986.43 incurred in connection with his enrollment
at the academy (the education expenses). On a Schedule C, Profit
or (Loss) From Business, included with his timely filed 1995
Federal income tax return, petitioner: (1) Listed his principal
business or profession as “golf instructor”; (2) reported gross
income of $2,010; (3) deducted total expenses (including the
education expenses) of $16,297.52; and (4) reported a net loss of
$14,287.52.
In the notice of deficiency, respondent disallowed the
education expenses deducted on the Schedule C, because petitioner
failed to establish that the expenses were “ordinary and
necessary”. Other adjustments made in the notice of deficiency
are not in dispute.
Discussion
On the Schedule C included with his 1995 return, petitioner
deducted the education expenses as trade or business expenses
paid in connection with his employment as a golf instructor. In
general, section 162(a) allows a deduction for all ordinary and
necessary expenses incurred in carrying on a trade or business.
Expenditures made by an individual for education that maintains
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Last modified: May 25, 2011