Mark graduates trom New York University and on February 1, 2017, accepts a posit

ID: 2597929 • Letter: M

Question

Mark graduates trom New York University and on February 1, 2017, accepts a position with a public accounting frm in Chicago. Mark is a resident of New York In March, Mark travels to Chic ago to locate a house and starts to work in June. He incurs the folowing expenses, none of which are reimbursed by the puolic accounting firm l(Cick the icon to view the expenses.) Read the requirements. Requirement a. What is Mark's moving expense deduction? Complete the table below to determine Mark's moving expense deduction (Enter a if an item is not deductible) Automobile expense en route (800 mles at 17 cents per mile-standard mileage rate) Cost of meals en route Househunting trip travel expenses Moving van experses Commission on the sale of Mark's New York condominium Points paid to acquire a mortgage on Mark's new residence in Chicago Temporary living expenses for one week in Chic ago (hotel and $250 in meals) Temporary storage of furniture and household goods in Chicago for 10 days unbl his house is ready Total deductible expenses Requirement b. How are the deductible expenses classited on Mank's tax return? The moving expenses are deductble for AGI Requirement c. How would your answer to Part a change if all of Mark's expenses were reimbursed by his employer and he received a check for $12,566 Under this fact pattern, the answer to Part a woud employer and he rocerved a check for $12,566 he [would nstead r change all of Marks expenses were reimbursed by his report a net increase in gross income ol S

Explanation / Answer

1. Calculation of Moving expenses

Particulars

Amount

Reason

Automobile expenses en route

136

Automobile expenses upto standard mileage are deductible moving expenses as per IRS

Costs of meals en route

Travel costs like lodging but not including meals is deductible. Meals are not moving expenses as per IRS

House hunting trip travel expenses

House hunting expenses not deductible

Moving Van expenses

2,900

Allowable

Commission on sale of condominium

Expenses on buying & selling of home are not deductible

Points paid to acquire mortgage

Expenses of buying or selling a home (including closing costs, mortgage fees, and points) are not deductible.

Temporary living expenses in Chicago

Only lodging expenses en route are allowable, temporary residence is not deductible.

Temporary Storage of furniture

1,150

Temporary storage for 30 days is deductible. In the given case it is only 10 days

Total Deductible expenses

4,186

2. If all the expenses has been reimbursed by employer, then any excess received over deductible expenses will be treated as increase in gross income.

Increase in gross income = $12,566 - 4,186 = $8,380