New Business

[linda]

I have a client who finished real estate school and got her license in October. She did not sell any property before the end of the year. Can she deduct her school expenses, license fee and mileage even though there is no income to report this year? She has sold properties in 2006, so will have income for 2006.

[OldJack]

Education costs to qualify for a new profession is not normally deductible.

Education expenses you incur to meet the
minimum requirements of your present trade or
business, or those that qualify you for a new
trade or business, are not deductible. This is true
even if the education maintains or improves
skills presently required in your business. For
more information on education expenses, see
Publication 970.

[Safire]

Since she was licensed before the end of the year, if she had costs involved with actually trying to sell properties, such as mileage and advertising, I would allow her those expenses even though she had no income. Also, I would let her have the license fee, but not the education expense. ( because of the reason the prior poster pointed out )

In 2006, if she has additional educational fees to keep her licenses, then yes she will get those as regular business expense.