Kelly is a self-employed tax attorney whose practice primarily involves tax plan
ID: 2490183 • Letter: K
Question
Kelly is a self-employed tax attorney whose practice primarily involves tax planning. During the year, she attended a three-day seminar regarding new changes to the tax law. She incurred the following expenses:
a. How much can Kelly deduct? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. Kelly believes that obtaining a CPA license would improve her skills as a tax attorney. She enrolls as a part-time student at a local college to take CPA review courses. During the current year, she spends $1,075 for tuition and $340 for books. How much of these expenses can Kelly deduct?
Lodging $675 Meals 144 Course registration 700 Transportation 115Explanation / Answer
Ans a Particular Amt Lodging $675 Meals (144*50%) 72 Course registration 700 Transportation 115 Total Deductions $1,562 Ans b If a normal position is seen there will be no deductions for educational expenses Education expenses are deducted under two circumstances: 1) Improves or maintains skills required by the taxpayer in his/her employment 2) Meets the express requirement of an employer But it is not deducted if educations which she is obtaining for a new trade or business Now CPA qualifies as a new profession which is related but new so expenses are not deductible In only extreme circumstances CPA would not be considered as new profession as she is already a tax attorney If this is the case than only she will be eligible for tutions fees deduction but not for other expenses
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