21 Jun Training cost deduction not a slam dunk

Q. My son is in college and plays basketball for his college team. He also does extra training for himself. If he spends the summer getting paid to train little kids, can he deduct his own training costs?
— His biggest fan

A. It’s very exciting for your son to get paid to do something he loves.

But that doesn’t make the money part easy.

When a college student pays money for basketball instruction, it is considered a personal expenditure with no income tax benefits, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

But if your son is a paid trainer himself, it’s a different story.

You cannot deduct the cost of entering a trade or business, Kiely said.

“College or vocational school tuition is not deductible,” Kiely said. “But once you are in a trade or business, any educational expenses you incur that improves or maintains skills needed in your present work are deductible business expenses.”

So the question is how much of your son’s training costs are tax deductible.

Certainly deducting all of his expenses, Kiely said, would not be a good idea, but a portion should be allowed.

He recommends your son add up the time he spends playing basketball and the time he spends teaching his kids and use that ratio to determining the deductible portion.

One additional thought: if your son is on an NCAA basketball team, he might be violating NCAA rules, Kiely said.

“The NCAA requires players to be 100 percent amateur at all times,” he said. “Getting paid to teach basketball might be a problem. Teaching baseball would not.”

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This post was first published in June 2016.