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Petitioner left her position as an engineer in New Zealand
to come to the United States and pursue an M.B.A. She left with
no promise of a specific job waiting for her once she completed
the degree. A currently unemployed taxpayer can remain engaged
in a trade or business in which she was previously involved and
to which she intends to return. Haft v. Commissioner, 40 T.C. 2,
6 (1963). Accordingly, the absence of specific employment does
not necessarily mean that petitioner left her trade or business,
provided that she intended to return to that trade or business
after she completed her education.
There is no dispute that before and after her M.B.A.,
petitioner worked in the beverage industry. The proper focus,
however, is on the effect petitioner’s M.B.A. had on the jobs she
was qualified to perform rather than on the industry within which
she labored. When education qualifies a taxpayer to perform
significantly different tasks and activities from those she could
perform before, then that education is deemed to qualify the
taxpayer for a new trade or business. Robinson v. Commissioner,
78 T.C. 550, 552 (1982). Petitioner must therefore prove that
her M.B.A. did not qualify her to perform significantly different
tasks from those she performed in New Zealand when working as an
engineer. We are instructed to apply an objective standard in
considering whether specific education qualifies a taxpayer for a
new trade or business. Id. at 556-557.
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Last modified: March 27, 2008