Nancy has worked as a nurse in a hospital for 10 years. In the past 5 years, she has handled more responsibilities and been promoted. In the past two years, she became a risk coordinator and was in charge of risk management for the hospital. In order to further develop her skills and in order to be more effective in her current and future roles, Nancy decides to enroll in a Masters of Business Administration/Hospital Management night-class program. Nancy continues her same job while attending school at night. Nancy also intends to continue working for the same hospital upon graduation. Nancy paid $18,000 in tuition for the MBA.

(a) Assume it is tax year 2016, Nancy claims all $18,000 as a deduction on her 2016 tax return. Should Nancy be allowed this deduction?

(b) Assume instead it is tax year 2020, may Nancy claim a deduction for the tuition? If so, how much?

(c) Does your answer to (a) change if Nancy has to take a leave of absence from her job in order to attend the MBA program full time?

Answer rating: 100% (QA)

a In tax year 2016 Nancy would not be allowed to claim the full 18000 tuition as a deduction on her ... View the full answer