Question

For each of the following independent situations, determine whether any of the expenditures qualify as deductible education expenses in connection with a trade or business (Reg. Sec. 1.162-5). Are the expenditures classified as for AGI or from AGI deductions?__________________________________________________________________________________________________a. Law school tuition and books for an IRS agent who is pursuing a law degree: $2,000_____________________________________________________________________________________________b. Continuing professional accounting education expenses of $1,900 for a self-employed CPA: travel, $1,000 (including $200 meals); registration fees, $800; books, $100.______________________________________________________________________________________________c. Tuition and books acquired for graduate education courses required under state law for a schoolteacher in order to renew a provisional certificate: $1,000._____________________________________________________________________________________________d. Bar review courses for a recent law school graduate: $1,000.

Answer 1

Answer:

a) Not deductible.

b) Deductible for AGI.

c) Deductible from AGI

d) Not deductible

Explanation:

a. Law school tuition and books for a self-employed individual who works in the income tax business and is pursuing a law degree : $2,000:-

Not deductible. Education qualifies a taxpayer for a trade or business.

b. Continuing professional accounting education expenses of $1,900 for a self-employed CPA: travel, $1,000 (including $200 meals); registration fees, $800;books, $100:

This is deductible for AGI. However, out of all that is deductible here only meals will be deducted by half.  (($200 x 0.50 = $100) is deductible)

c. Tuition and books acquired for graduate education courses required under state law for a schoolteacher in order to renew a provisional certificate: $1,000.

This is deductible from AGI, assuming the graduate is an employee i.e a school teacher.

d. Bar review courses for a recent law school graduate: $1,000:

Not deductible.