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(2) Meets the express requirements of the
individual’s employer, or the requirements of
applicable law or regulations, imposed as a condition
to the retention by the individual of an established
employment relationship, status, or rate of
compensation. [Sec. 1.162-5(a), Income Tax Regs.]
Implicit in both section 162 and the regulations is that the
taxpayer must be established in a trade or business before any
expenses are deductible. Link v. Commissioner, 90 T.C. 460
(1988), affd. without published opinion 869 F.2d 1491 (6th Cir.
1989); Jungreis v. Commissioner, 55 T.C. 581 (1970). The
question of whether petitioner was established in a trade or
business is one of fact which we must discern from evidence in
the record. Link v. Commissioner, supra; sec. 1.162-5(b)(2),
Income Tax Regs. Petitioner was employed by CE on February 4,
1996. One of the questions presented in this case is whether at
that point he was established in the trade or business of
piloting fixed-wing aircraft.
For the 7 months prior to joining CE, petitioner flew
helicopters for Era in the Gulf of Mexico. His work at Era leads
us to conclude that as of February 4, 1996, petitioner was
established in the trade or business of piloting helicopters.
This Court has held that a helicopter pilot is engaged in a
different trade or business than an airline pilot. Lee v.
Commissioner, T.C. Memo. 1981-26, affd. 723 F.2d 1424 (9th Cir.
1984). Prior to February 4, 1996, petitioner had never flown for
or been hired by an airline. There is no evidence in the record
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