- 4 - deduct $620 for the gift because $80 was attributable to services rendered in the form of the dinner. Deduction for Education Loan Interest Before he commenced his studies at Columbia, petitioner allegedly borrowed money from a Dutch bank to finance his educational expenses. The loan was secured by the home of petitioner’s parents, and his parents were guarantors on the loan. EURO 6,197 was paid as interest in 2000, and the parties agree that the dollar conversion is $5,329. Petitioner claims that he is entitled to a deduction for education loan interest under section 221. Discussion Section 162 Deduction for Educational Expenses “Expenditures made by a taxpayer in obtaining an education or in furthering his education are not deductible unless they qualify under section 162 and � 1.162-5”. Sec. 1.262-1(b)(9), Income Tax Regs.; see also Boser v. Commissioner, 77 T.C. 1124, 1132 (1981). Section 162(a) limits deductions for all “ordinary and necessary expenses” to those incurred “carrying on any trade or business”. The determination of whether a taxpayer is engaged in a trade or business “requires an examination of the facts in each case.” Higgins v. Commissioner, 312 U.S. 212, 217 (1941). “[T]o be engaged in a trade or business, the taxpayer must be involved in the activity with continuity and regularity and thatPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011