Have a Tax Question? Ask a Tax Expert
Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.
Are you still working for the company in Reno?
I have no problem with writing my answer. So when you were put up in an apartment did you expect the assignment to last more than a year?
If you expected the assignment to last under 1 year you would be able to claim temporary living expenses. Temporary living expenses include hotel lodging (or apartment rent for longer stays), meals, and local transportation. Meals may be estimated using federal per diem rates.
Are you reimbursing the company or the apartment for the $5,000.
I believe that you could make a good case that the $5,000 was a rental expense. Similar to if you put a deposit down for an apartment and it is withheld for damages.
I am assuming that you are a W-2 employee. You would report temporary living expenses on form 2106. These expenses would flow to Schedule A other deduction subject to a 2% AGI limitation. Let's assume that your Adjusted Gross income is $100,000. If the $5,000 is the total amount listed on form 2106 you would subtract $2,000 (2% of AGI). So you would receive a $3,000 itemized deduction. You would only receive a benefit if you itemize.