Publication 521 - Moving Expenses - 2011 (Page 13 of 19) in pdf

Motel rooms . . . . . . . . . . . . . .

$1,450

choose to deduct moving expenses in the year your em-

Meals . . . . . . . . . . . . . . . . . . .

2,280

3,730

ployer reimburses you if:

•

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $43,172

You paid the expenses in a year before the year of

reimbursement, or

•

Tom was reimbursed $10,797 under an accountable

You paid the expenses in the year immediately after

plan. His employer gave him the following breakdown of

the year of reimbursement but by the due date, in-

the reimbursement that was allowed under the employer’s

cluding extensions, for filing your return for the reim-

plan.

bursement year.

Moving personal effects . . . . . . . . . . . . . . . . .

$ 6,800

How to make the choice. You choose to deduct mov-

Travel (and lodging) to San Diego . . . . . . . . . .

598

ing expenses in the year you received reimbursement by

Travel (and lodging) for househunting trip . . . .

449

taking the deduction on your return, or amended return, for

Lodging for temporary quarters . . . . . . . . . . . .

1,450

that year.

Loss on sale of home . . . . . . . . . . . . . . . . . . .

1,500

You cannot deduct any moving expenses for

Total reimbursement . . . . . . . . . . . . . . . . . . . .

$10,797

which you received a reimbursement that was not

included in your income.

The employer included this reimbursement on Tom’s

CAUTION

Form W-2 for the year. The reimbursement of allowable

expenses, $7,398 for moving household goods and travel

to San Diego, was included in box 12 of Form W-2. His

Illustrated Example

employer identified this amount with code P.

The employer included the balance, $3,399 reimburse-

Tom and Peggy Smith are married and have two children.

ment of nonallowable expenses, in box 1 of Form W-2 with

They owned a home in Detroit where Tom worked. On

Tom’s other wages. Tom must include this amount on

February 8, 2011, Tom’s employer told him that he would

Form 1040, line 7. The employer withholds taxes from the

be transferred to San Diego as of April 10 that year. Peggy

$3,399, as discussed under Reimbursement for deductible

flew to San Diego on March 1 to look for a new home. She

and nondeductible expenses under Tax Withholding and

put a down payment of $25,000 on a house being built and

Estimated Tax, earlier. Also, Tom’s employer could have

returned to Detroit on March 4. The Smiths sold their

given him a separate Form W-2 for his moving expense

Detroit home for $1,500 less than they paid for it. They

reimbursement.

contracted to have their personal effects moved to San

To figure his tax deduction for moving expenses, Tom

Diego on April 3. The family drove to San Diego where they

enters the following amounts on Form 3903.

found that their new home was not finished. They stayed in

a nearby motel until the house was ready on May 1. On

Item 5 — moving personal effects (line 1) . . . . .

$8,000

April 10, Tom went to work in the San Diego plant where he

Item 6 — driving to San Diego ($418 + $180)

still works.

(line 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

598

Their records for the move show:

Total tax deductible moving expenses (line 3) . .

$8,598

1) Peggy’s pre-move househunting

Minus: Reimbursement included in box 12

trip:

of Form W-2 (line 4) . . . . . . . . . . . . . . . . . . .

7,398

Travel and lodging . . . . . . . . .

$ 449

Tax deduction for moving expenses (line 5) . . .

$1,200

Meals . . . . . . . . . . . . . . . . . . .

524

2) Down payment on San Diego

home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,000

Tom’s Form 3903 is shown, later. He also enters his

deduction, $1,200, on Form 1040, line 26.

3) Real estate commission paid on

sale of Detroit home . . . . . . . . . . . . . . . . . . .

3,500

Nondeductible expenses. Of the $43,172 expenses that

4) Loss on sale of Detroit home (not

Tom and Peggy incurred, the following items totaling

including real estate commission) . . . . . . . . .

1,500

$34,574 ($43,172 – $8,598) cannot be deducted.

5) Amount paid for moving personal

•

Item 1 — pre-move househunting expenses of

effects (furniture, other household

$524.

goods, etc.) . . . . . . . . . . . . . . . . . . . . . . . . .

8,000

•

Item 2 — the $25,000 down payment on the San

6) Expenses of driving to San Diego:

Diego home. If any part of it were for payment of

Mileage (Start 14,278;

deductible taxes or interest on the mortgage on the

End 16,478)

house, that part would be deductible as an itemized

2,200 miles at 19 cents a mile

$ 418

deduction.

Lodging . . . . . . . . . . . . . . . . .

180

Meals . . . . . . . . . . . . . . . . . . .

320

918

•

Item 3 — the $3,500 real estate commission paid on

the sale of the Detroit home. The commission is

7) Cost of temporary living

expenses in San Diego:

used to figure the gain or loss on the sale.

Publication 521 (2011)

Page 13

Publication 521 - Moving Expenses - 2011 Page 13

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