Reference no: EM132723883

Lauren Smith is an attorney who, in 2012, was licensed to practice law in the state of New York, after graduating from law school and passing the New York State bar examination. Lauren has practiced law in New York as a sole practitioner, doing business as Lauren Smith, LLC, Attorney and Counselor at Law. Given the success of her law practice, Lauren decided to open an office in Florida to better serve her snowbird clients and to grow her business. In order to practice law in Florida, Lauren had to take the Florida bar exam and qualify for admission to the bar in the State of Florida. In 2019, she paid $3,000 for a Florida bar review course and $1,500 in additional expenses to gain admission to the Florida State Bar in December 2019.

Lauren requests that you research the tax law regarding the deductibility of the above expenses on Schedule C of her 2019 Form 1040 federal income tax return.

Problem 1: Using the format for communicating research findings discussed in your Tax Research Content materials, submit a brief memorandum addressed to Lauren, in which you report your findings. Identify any relevant primary statutory, regulatory, and judicial authorities and discuss how these authorities affect your conclusion concerning the deductibility of Lauren's expenses as a business expense.