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Petitioner filed an individual Federal income tax return for
taxable year 2000 using a Form 1040NR, U.S. Nonresident Alien
Income Tax Return. On this return, petitioner claimed a
miscellaneous itemized deduction of $34,126. The expenses for
which this deduction was claimed were as follows, before
application of the section 67(a) limitation on miscellaneous
itemized deductions:
M.B.A. tuition $29,860
Books and school supplies 2,286
Computer depreciation 495
Job search expenses 869
Summer job expenses 918
Travel to school 552
34,980
In the statutory notice of deficiency, the sole adjustment was
respondent’s disallowance of this deduction. Petitioner concedes
$169 of the M.B.A. tuition and $50.86 of the computer
depreciation, and he concedes the entire amounts of the job
search, summer job, and travel expenses. The amounts remaining
at issue all relate to expenses petitioner allegedly incurred in
connection with the M.B.A. program.
In general, expenses which are ordinary and necessary in
carrying on a trade or business are deductible in the year in
which they are paid. 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)
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