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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 13370
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I moved from Anchorage Alaska to Houston TX October 2012.

Resolved Question:

I moved from Anchorage Alaska to Houston TX October 2012. As part of this process I sold my house in Alaska for $552,000. My initial purchase price was $661,003. This made for a loss on sale of $99,003.77.

My company had a relocation policy to cover this loss on sale, and gave me this amount as a benefit associated with the relocation. This is good, as I did not suffer the actual loss. However, the way they did it was to show the $99,003.77 as income. This has the effect of putting me in a higher tax bracket than I'd otherwise be in, even if some added tax was paid by the company to try to compensate for this added income (I am not sure what tax assumptions they made, but I think it was 20% of the loss on sale = $19,800.75.

The net effect of realizing $99,003.77 plus other relocation expenses was to put our taxable income (line 43) up to $446,851. Line 7 1040 was $524,525.

At this point (I have filed for extension) I need to calculate the moving expenses and get into line 26. My question is how to consider the extra 'income' from loss on sale of the home in Alaska. Can I show the loss on sale as a $99,003.77 as a moving expense, or loss on the home, which then offsets some of the 'income' from the relo benefit from my company?

Where and how do I do this, if I can take this loss of the home sale?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Hello, how are you today

MyVirtualCPA :

I hate to be the bearer of bad news, but unfortunately, you cannot take the loss on the sale as a deduction for a moving expense.

MyVirtualCPA :

The loss on the sale of your home is never recognized in any way.

MyVirtualCPA :

The reason that the $99K is showing as income is because your company gave that to you - it was not part of the actual sale transaction.

MyVirtualCPA :

To avoid this, they should have had a relocation company purchase your house for your basis. Then, the amount would have not been income.

MyVirtualCPA :

However, them giving you funds to cover the loss is just added income, subject to all appropriate taxes.

MyVirtualCPA :

I'm truly sorry if this is not the news you had hoped to hear. I wish I could have told you that you could take the loss, but unfortunately there is no way to do that. Please don't shoot the messenger.

MyVirtualCPA :

If you have received the answers that you need, please take a moment to rate my response "excellent' so that I may receive credit for assisting you today.

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 13370
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 6 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Expert:  Megan C replied 1 year ago.
Hello, Paul

I noticed that you could not join our chat. Please let me know if you cannot view the transcript and I will get it to you.

Basically, the amount you received from your company IS other income, and IS taxable. However, the loss on the sale of your house is not tax deductible, even as a moving expense. The company should have purchased or had a relocation company purchase, your house for your basis. This way, the extra income would have been part of the actual sale of the home and would have been excluded. However, giving you a supplemental amount after the sale, unrelated to the actual sale transaction itself, is additional income.

So, unfortunately, you cannot write off this loss. I'm truly sorry, and I wish I had better news for you. Please don't shoot the messenger.

Thanks again for using JustAnswer.com and have a great day. Please take a moment to rate my response "excellent" so that I may receive credit for helping today. Thanks again.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!

Customer: replied 1 year ago.

are you still here?

Expert:  Megan C replied 1 year ago.
Yes, Paul I am still here.

Do you need something additional?
Customer: replied 1 year ago.

yes, I asked if the loss on sale of the house would have been deductable had the company not relocated me...


 


i.e. I just sold it for a loss...


 


where would this be realized on the tax forms?


 

Customer: replied 1 year ago.

every time I send a question to you, the system goes back to the home page, and I lose this chat... very annoying


 


I did not see your answer until just a minute ago. How do I get it to stay in the chat?


 


 

Customer: replied 1 year ago.

never mind... this isn't working. just email me the transcript toXXX@XXXXXX.XXX


 


Thanks

Expert:  Megan C replied 1 year ago.
Paul,

The chat is gone once I exit out of it. You were showing offline, and sometimes when that happens you don't get notification that you have an answer. So, you're sitting there waiting for an answer, which you have, but you don't know it because you're not in the chat. So, when a customer shows offline on my end, I will get out of chat and send them a message letting them know they have an answer.

This is a different format. You will reply to me, then I to you, but you should still see everything you say once you log in your account and look at your question.

If you sold the house for a loss in any case, the loss would not be deductible. The loss on the sale of your home is NEVER deductible.

There's no tax form that would assist you with taking the loss of the sale of your home. It's unfortunate, but it's not allowed.

Please let me know if you need further clarifications. Thanks again for using JustAnswer.com and have a great day.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!

Expert:  Megan C replied 1 year ago.
Paul,

Unfortunately I cannot email you. It is against our TOS...an expert can never contact a customer off the website.

Thanks for your understanding...
Customer: replied 1 year ago.

you answered my question. thank you


 

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