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View Full Version : Tax question


jeffmjohnson53
01-25-2017, 05:30 AM
Trying to figure out if my type rating cost is deductible. I worked for a company with a promissory note that obligated me to pay a prorated portion of my type rating if I left before 2 years.

I left and paid what I owed. Is that amount deductible as an education or job related expense?


Machnumber
01-25-2017, 05:32 AM
Trying to figure out if my type rating cost is deductible. I worked for a company with a promissory note that obligated me to pay a prorated portion of my type rating if I left before 2 years.

I left and paid what I owed. Is that amount deductible as an education or job related expense?

I have the same situation. I have asked my Tax preparer, and have not heard back yet. I will let you know what I hear.

jeffmjohnson53
01-25-2017, 07:38 AM
I have the same situation. I have asked my Tax preparer, and have not heard back yet. I will let you know what I hear.
Thanks. I think it's legal but want to be sure.


Machnumber
01-25-2017, 10:48 AM
Thanks. I think it's legal but want to be sure.

I just spoke with the company I use to prep my taxes. They told me they would actually be checking with the IRS to determine how to handle this. So not exactly a cut and dry answer yet, but they did say to attach any documentation I have regarding the promissory note, and proof of payment to files I email them later.

maddogmax
01-25-2017, 11:00 AM
Tread lightly here. I was audited in the early 80's for deducting my ATP/Type rating as a educational expense. There had been a court decision that this training qualified me for a new position (right seat to left seat) and was not tax deductible. Can't remember if it was the ATP or the Type that triggered the audit

jeffmjohnson53
01-25-2017, 11:05 AM
Tread lightly here. I was audited in the early 80's for deducting my ATP/Type rating as a educational expense. There had been a court decision that this training qualified me for a new position (right seat to left seat) and was not tax deductible. Can't remember if it was the ATP or the Type that triggered the audit
Thanks maddog. I think the difference is that this type wasn't for a new position. It was required for a job I already had, if that makes any sense (ha ha)

jeffmjohnson53
01-25-2017, 11:05 AM
I just spoke with the company I use to prep my taxes. They told me they would actually be checking with the IRS to determine how to handle this. So not exactly a cut and dry answer yet, but they did say to attach any documentation I have regarding the promissory note, and proof of payment to files I email them later.
Ok. Thanks for the follow up.

mojo6911
01-25-2017, 11:42 AM
Unreimbursed Employee Expenses:

https://www.irs.gov/publications/p529/ar02.html

Don't go to a "tax preparer". Get a real CPA.

jeffmjohnson53
01-25-2017, 11:59 AM
Unreimbursed Employee Expenses:

https://www.irs.gov/publications/p529/ar02.html

Don't go to a "tax preparer". Get a real CPA.
Thanks for the link. It looks like the IRS could deny based on the 1st bullet? It could be argued that the minimum educational requirement for the job was a commercial/instrument. They didn't send you to the type rating until you had the job.

"You can't deduct expenses you have for education, even though one or both of the preceding tests are met, if the education:

Is needed to meet the minimum educational requirements to qualify you in your trade or business, or

Is part of a program of study that will lead to qualifying you in a new trade or business."

joepilot
01-30-2017, 07:56 AM
If you were working as a paid commercial pilot prior to getting hired by the company that required the training bond, then the expense was not to qualify for a new trade or business. You were a professional pilot both before and after the type rating. Your employer required you to take the training as a condition of employment, your contract required that you pay for the training.

Joe

jeffmjohnson53
01-31-2017, 06:08 AM
If you were working as a paid commercial pilot prior to getting hired by the company that required the training bond, then the expense was not to qualify for a new trade or business. You were a professional pilot both before and after the type rating. Your employer required you to take the training as a condition of employment, your contract required that you pay for the training.

Joe
I agree. I talked to a CPA that says it's deductible.



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