Question

Education Expenses. Indicate the amount, if any, of deductible education expenses in each of the following cases. Comment briefly on your answer and state whether the deduction is deductible for or from adjusted gross income: C is self-employed as a plumber, but is training to become a computer pro- grammer. During the year, he paid $500 for tuition and books related to a college course in programming. b. E is self-employed as a licensed nurse. During the year, she spent $300 on courses to become a registered nurse. R paid a $1,000 fee to take the C.P.A. exam and $3,000 for a C.P.A. review 8-23 a. C. R currently is employed by a public accounting firm. The firm reim- course. bursed him for the cost. Ris an IRS agent. This year, he began taking courses toward a law degree em- phasizing tax. Tuition and books cost for the year cost $20,000. d. tions indicate whether the

Answer 1

Education Expenses

No.	Name	Type of Education Expenses	Total Expenses	Deductible Expenses
a	C - Self Employed Plumber	Tuition & Books for programming course	500	Nil
b	E - Self Employed licensed nurse	Course fee for registered nurse	300	300
c	R - Employee in Public accounting firm	CPA Exam & CPA Review course	4,000	Nil
d	R - IRS Agent	Tuition & Books for law degree	20,000	20,000

(a) C is a plumber and he is doing course on programming which is not related to his business. Programming course qualifies him for a new trade or business. Hence, it is not deductible from adjusted gross income.

(b) E is self-employed licensed nurse and she is doing course on registered nurse which improves her skills in her profession. Here, the profession is same. The course doesn't results or qualify for a different trade, business or profession. Hence, it is deductible from adjusted gross income.

(c) R is employed in public accounting firm and he paid CPA exam fees and CPA review course fees. Here it is same profession which improves the skills required for his present job. However, the same cost is reimbursed by the employer. Further, after doing CPA course, it enables R to start a new job as a CPA independently and leave the present job. Hence, it is not deductible from adjusted gross income.

(d) R is an IRS agent and he paid for tuition and books cost towards course on law degree emphasizing tax. Here, the course improves his skills for his present job. Hence, it is deductible from adjusted gross income.