Yuanqiang Zhang - Page 9

                                        - 8 -                                         
          Tax Regs.  The regulations provide that, within this category of            
          expenses:                                                                   
               Only the minimum education necessary to the retention                  
               by the individual of his established employment                        
               relationship, status, or rate of compensation may be                   
               considered as undertaken to meet the express                           
               requirements of the taxpayer’s employer.                               
          Sec. 1.162-5(c)(2), Income Tax Regs.  As discussed above, during            
          the year in issue petitioner had left his former employment and             
          had not yet started his new employment.  Thus, because petitioner           
          did not have an established employment relationship, status, or             
          rate of compensation during that year, petitioner is not entitled           
          to a deduction pursuant to the second category of deductible                
          expenses under section 1.162-5(c)(2), Income Tax Regs.                      
               Because petitioner’s education expenses do not fall into               
          either category of deductible expenses under the regulations,               
          petitioner is not entitled to the deductions claimed for the                
          M.B.A. program.  We need not address whether the expenses fall              
          into either of the categories of nondeductible expenses under               
          section 1.162-5(b), Income Tax Regs.                                        
               Reviewed and adopted as the report of the Small Tax Case               
          Division.                                                                   
               To reflect the foregoing,                                              
                                             Decision will be entered                 
                                        for respondent.                               








Page:  Previous  1  2  3  4  5  6  7  8  9  

Last modified: May 25, 2011