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undergraduate engineering education which petitioner obtained in
this case clearly qualified him for a new trade or business.
See, e.g., Cristea v. Commissioner, T.C. Memo. 1985-533; Josephs
v. Commissioner, T.C. Memo. 1979-371; Warfsman v. Commissioner,
T.C. Memo. 1972-137.
Because the education expenses do not meet the requirements
of section 1.162-5, Income Tax Regs., the expenses would not be
deductible under section 162. Consequently, any amounts
petitioner received as reimbursement therefor would not be
excludable under section 132, and such amounts could not be part
of an accountable plan and would not be excludable under section
1.62-2(c)(4), Income Tax Regs. Sec. 132(d); Biehl v.
Commissioner, supra.
We conclude that the $8,000 petitioner received in 1999 from
NSBE is compensation for services and is includable in his income
under section 61(a)(1).2
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
2Respondent determined that petitioner was liable for self-
employment tax with respect to the $8,000 payment. Petitioner
has not specifically disputed this determination, and nothing in
the record indicates that this amount was other than “self-
employment income” within the meaning of sec. 1401.
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