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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Hi, My wife was relocated by her company and was given a one

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Hi, My wife was relocated by her company and was given a one time bonus in the amount of 9.5% times the appraised value of our home. We suffered any other cost for selling our home plus apartment rent until our home sold. Well, I home did not sell until 1 year later (for $25,000 less than the appraisal) causing us to have dual residence expenses and a loss in equity. Is any of this tax deductible. By the way, we paid regular employment taxes on the one time gift for relocation.
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
HelloCustomer

Generally, any amount that you are paid by an employer for moving expenses is considered to be taxable income, unless that amount was paid to you under an accountable plan. An accountable plan is one where you actually provide the employer with a detailed accounting of moving expenses which you incurred, and you are reimbursed for that amount only. If the employer strictly paid you a flat amount as a bonus for having to relocate, then the entire amount is reported as taxable income.

You may, however, deduct some of your expenses related to the move, if the move was made in connection with your employment, and was made within one year of the new employment taking effect. Your deductions would include such things as the cost of moving your belongings to your new home, travel (including lodging but not meals) to your new home. You can deduct the cost of storage for up to 30 days and the cost of disconnecting utilities.

However, you cannot deduct some of the expenses which you have mentioned, such as the loss on the sale of your home, or the cost to rent an apartment until your home was sold.

I am giving you a link to a section of the IRS website which details which moving expenses in connection with new employment are deductible on your return.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you for using JA

http://www.irs.gov/publications/p521/ar02.html#en_US_publink100043359
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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