Radin v. Commissioner

1987 T.C. Memo. 348, 53 T.C.M. 1339, 1987 Tax Ct. Memo LEXIS 348
CourtUnited States Tax Court
DecidedJuly 20, 1987
DocketDocket No. 43303-85.
StatusUnpublished
Cited by2 cases

This text of 1987 T.C. Memo. 348 (Radin v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Radin v. Commissioner, 1987 T.C. Memo. 348, 53 T.C.M. 1339, 1987 Tax Ct. Memo LEXIS 348 (tax 1987).

Opinion

TED RADIN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Radin v. Commissioner
Docket No. 43303-85.
United States Tax Court
T.C. Memo 1987-348; 1987 Tax Ct. Memo LEXIS 348; 53 T.C.M. (CCH) 1339; T.C.M. (RIA) 87348;
July 20, 1987.
Ted Radin, pro se.
Peter M. Ritteman, for the respondent.

PATE

MEMORANDUM FINDINGS OF FACT AND OPINION

PATE, Special Trial Judge: This case was heard pursuant to the provisions of section 7456(d) of the Code (redesignated as sec. 7443A(b) by the Tax Reform Act of 1986, Pub. L. 99-514, section 1556, 100 Stat. 2755) and Rules 180, 181 and 182. 1

Respondent determined a $ 460 deficiency in petitioner's 1983 Federal income tax. After concessions, the issues for our decision are: (1) whether petitioner is entitled to deduct the cost of certain professional books and examination fees; and (2) whether petitioner is entitled to a dependency exemption for his daughter. Ted Radin (hereinafter "petitioner") resided*351 in Detroit, Michigan at the time the petition in this case was filed. Some of the facts have been stipulated and are incorporated herein by this reference.

PROFESSIONAL EXPENSES

Petitioner has an MBA and a Ph.D. in Mathematics. During 1983, he taught mathematics, economics and computer science at Wayne State University and also worked as an actuarial analyst. In this regard, he took several parts of the Society of Actuaries' examination. When he passes seven parts of the exam he will qualify as an "enrolled actuary" which entitles him to prepare and submit certain pension plan documents to the Internal Revenue Service. See sec. 6059(b). A candidate who successfully completes all ten parts of the examination becomes a Fellow of the Society of Actuaries (FSA) conferred with additional rights and privileges.

On his 1983 Federal income tax return, petitioner deducted a total of $ 2,851.35 of professional expenses on Schedule A. At trial, petitioner claimed an even greater deduction for professional expenses, comprised of the following:

Actuarial books & materials$ 1,201.08
Actuarial examination fees540.00
Teaching expenses - Wayne State404.24
Office expenses315.51
Job seeking expenses596.09
Total$ 3,056.92

*352 None of petitioner's expenses were reimbursed by his employer.

Respondent disallowed all of petitioner's professional expenses in the notice of deficiency, but, at trial, conceded that office expenses, job seeking expenses and the expenses of teaching at Wayne State are deductible. Moreover, respondent also conceded that the entire $ 3,056.92 had been expended by petitioner but continued to question the deductibility of the actuarial books, materials and exam fees alleging that they were incurred to qualify petitioner for a new job or profession. Petitioner contends that, as an actuarial analyst, he was required to prepare and sit for actuarial exams to maintain his present position and salary and, therefore, these amounts are deductible. Petitioner also contends that he used the books while working at his job as an actuarial analyst but admits these same books were made available for his use by his employer.

Expenditures for education are deductible if the education maintains or improves skills required in the individual's employment. Sec. 1-162-5(a), Income Tax Regs. However, even*353 if these qualifications are met, education expenses are not deductible if they lead to qualifying the individual for a new trade or business. Sec. 1-162-5(b)(3), Income Tax Regs.; Johnson v. Commissioner,77 T.C. 876, 878 (1981). It is well established that we must employ objective standards in determining the applicability of section 1.162-5(b)(3), Income Tax Regs.Bodley v. Commissioner,56 T.C. 1357, 1360 (1971); Weiler v. Commissioner,54 T.C. 398, 408 (1970). The subjective intent of the taxpayer is not determinative.

In evaluating whether the "new trade or business" exception applies, this Court uses a commonsense approach, that is, we compare the types of tasks and activities the taxpayer was qualified to perform before he acquired the education at issue and those he is qualified to perform afterwards. Davis v.

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1987 T.C. Memo. 348, 53 T.C.M. 1339, 1987 Tax Ct. Memo LEXIS 348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/radin-v-commissioner-tax-1987.