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During 2007 A guy graduates from dental school and looks into buying a practice. He pays a consulting firm $1,000 to research and help him make an offer. The deal falls through and he ends up going to work for an existing practice and has W2 income for 2007.

Can he deduct the $1,000?

(The only place I thought was maybe as part of a unreimbursed job expense on schedule A subject to 2%)

I think it fits there.

I'm not sure it does. In order to be deductible it has to be an expense of looking for a new position in your current profession. A graduate from dental school doesn't have a "current" profession until he begins work. I believe this is similar to the rule against deducting educational expenses that qualify you for a new job. (he writes, realizing that with all the educational tax benefits available now this rule rarely comes into play)

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