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Thus, we find that petitioner was not established in the
trade or business of piloting fixed-wing aircraft prior to
incurring the expense of new-hire training and therefore is not
eligible for an education expense deduction.
Unreimbursed Business Expense
Section 162, of course, allows the deduction of business
expenses other than education expenses. Generally, a taxpayer is
entitled to deduct from gross income ordinary and necessary
business expenses that are directly connected with or pertain to
the taxpayer’s trade or business. Sec. 1.162-1(a), Income Tax
Regs. An individual may engage in the trade or business of being
an employee. Gapikia v. Commissioner, T.C. Memo. 2001-83. Trade
or business expense deductions are allowed for those taxpayers
who are not reimbursed for expenses incurred because of their
employment. Primuth v. Commissioner, 54 T.C. 374, 377 (1970).
If, as a condition of employment, an employee is required to
incur unreimbursed expenses, the employee is entitled to a
deduction for those expenses. Fountain v. Commissioner, 59 T.C.
696, 708 (1973); Spielbauer v. Commissioner, T.C. Memo. 1998-80;
Scalley v. Commissioner, T.C. Memo. 1992-123.
During 1996, and upon commencing training, petitioner was an
employee of CE. CE required petitioner, as well as all other
newly hired pilots as a condition of employment to attend and pay
for new-hire training. CE had two purposes for its new-hire
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