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Discussion
Education Expense Deduction
Petitioner invites us to reach our decision by determining
whether the FAA or the employer is the proper source to establish
“minimum educational requirements” for a pilot’s position.
Because we find that petitioner was not established in the trade
or business of being a pilot prior to beginning CE’s training, we
need not reach the issue urged by counsel.
Section 162(a) allows a deduction for all ordinary and
necessary expenses paid or incurred by a taxpayer in carrying on
any trade or business.
Section 262, however, expressly provides that no deduction
is allowable for personal, living, or family expenses. Section
1.262-1(b)(9), Income Tax Regs., provides that expenditures made
by a taxpayer in obtaining an education or in furthering his
education are not deductible unless they qualify under section
162 and section 1.162-5, Income Tax Regs. Section 1.162-5(a),
Income Tax Regs., sets forth objective criteria for deciding
whether an education expense is a business, as opposed to a
personal, expense. This regulation provides, with certain
exceptions not relevant here, that education expenses are
deductible business expenses if the education--
(1) Maintains or improves skills required by the
individual in his employment or other trade or
business, or
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Last modified: May 25, 2011