Legal Question in Tax Law in California

I have been a real estate broker for the past 3+ years. I decided to go to law school to specialize in real estate law. I will graduate in May with a certificate in real estate law. I have made $250,000 for the past 3 years and want to write off my law school expense of approximately $20,000 per year (the other half is a scholarship).

When I filed my taxes last year, my tax professional said I could not write off the $20,000 because it qualifies me for a new profession. However my sole intent to go to law school was not to become a full time attorney upon graduation but to learn more about real estate laws and become a better real estate broker.

From what I gather, there is not even any other education write off I can use. Because I am filing my taxes in the next few months, should I amend my 2011 tax to include the law school as a write off and apply it in 2012 as well? If so, is there a case or law I can use to justify this? Is there a high chance of being audited? Any information on this would be appreciated.


Asked on 1/09/13, 6:48 pm

1 Answer from Attorneys
Robert Kubler The Kubler Law Firm

To deduct business expenses, including education expense it doesn't depend on whether you are now qualified for a new profession. What matters is whether you're actually "carrying on" a trade or business, why and how you got the degree.

Your tax professional is partly right as there is authority (PLR #____ ) that says "qualify" for new profession but the holding of the cited case is on whether the law student was in a trade before earning an LLM and thus carrying on. In that case the LLM could be deducted. In another it was denied.

Based on the limited facts it would appear you do indeed qualify to deduct it.

Read more
Answered on 1/10/13, 12:33 am


Related Questions & Answers

More Tax and Taxation Law questions and answers in California