- 7 - Section 162 generally allows a deduction for expenses which are ordinary and necessary in carrying on a trade or business. Sec. 162(a). Such expenses may include educational expenses paid in carrying on the trade or business of being an employee. Sec. 1.162-5, Income Tax Regs. To be deductible, such expenses must be for education which (1) maintains or improves skills required by the taxpayer in his employment or other trade or business, or (2) meets the express requirements of the taxpayer’s employer, or of applicable law or regulations, imposed as a condition to the retention by the taxpayer of an established employment relationship, status, or rate or compensation. Sec. 1.162-5(a), Income Tax Regs. There is nothing in the record which indicates that petitioner’s engineering education fell within one of these two categories: There is no suggestion that the education maintained or improved skills which petitioner used in his duties at NSBE--fundraising and handling career fairs--or that it was required in the context of his established employment relationship, status, or rate of compensation. Furthermore, expenses which fall into either of the above two categories nevertheless are not deductible if the education (1) is required in order to meet the minimum educational requirements for qualification in the taxpayer’s employment or other trade or business, or (2) qualifies the taxpayer for a new trade or business. Sec. 1.162-5(b), Income Tax Regs. ThePage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011