- 7 -
MBA studies but actually spent $20,000. No evidence was offered
to substantiate these amounts.
Section 162 and the regulations thereunder generally allow a
deduction for ordinary and necessary business expenses, including
expenses of education, which (1) maintain or improve skills
required by an individual in his employment or other trade or
business, or (2) meet 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.
However, section 1.162-5(b), Income Tax Regs., describes certain
educational expenditures that are not deductible as ordinary and
necessary business expenses even though the education may
maintain or improve skills required by the individual in his
employment or may meet the express requirements of the
individual's employer or of applicable law or regulations. As
applicable here, such expenditures include those "made by an
individual for education which is part of a program of study
being pursued by him which will lead to qualifying him in a new
trade or business." Sec. 1.162-5(b)(3), Income Tax Regs.
Under section 1.162-5(b)(3), Income Tax Regs., if a taxpayer
is pursuing a course of educational study which qualifies the
taxpayer for a new trade or business, the expenditures are not
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011