I'm running into the exact same issue (apparently in the exact same state, as well!). Here's the dilemma. The board exam is not required for practicing medicine - one does not need to be board certified for practice, so that seems quite clearly deductible. The USMLE exam and permanent licensure are required, ultimately, to practice after residency (but not if you stay in research). However, they are NOT required to work in a hospital if you are still a resident as you are issued a temporary license through the residency program. At the same time, is completing residency to start practicing medicine a "new trade or business"? I would argue that you can't remain a resident forever and that the transition is the natural progression of the same trade rather than a new one. I'm not sure whether the IRS agrees with me, though...

Thanks!

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