| Michael graduates from New York University and on February 1st of the current year, accepts a position with a public accounting firm in Chicago. Michael is a resident of New York. In March, Michael travels to Chicago to locate a house and starts to work in June. He incurs the following expenses, none of which are reimbursed by the public accounting firm. |
| | Item | | | | | Amount |
| | Automobile expense en route (1,000 miles at 16.5 cents per mile - standard mileage rate) |
| | | | | | | $ 165 |
| | Cost of meals en route | | | | | 100 |
| | Househunting trip travel expenses | | | | | 1,400 |
| | Moving van expenses | | | | | 3,970 |
| | Commission on the sale of Michael's New York condominium |
| | | | | | | 3,500 |
| | Points paid to acquire a mortgage on Michael's new residence in Chicago |
| | | | | | | 1,000 |
| | Temporary living expenses for on week in Chicago (hotel and $100 in meals) |
| | | | | | | 400 |
| | Expenses incurred in decorating the new residence | | | | | 500 |
| | Total expenses | | | | | $ 11,035 |
| Required: | | | | | | | | Solutions |
| a. What is Michael's moving expense deduction? |
| b. How are the deductible expenses classified on Michael's tax return? |
| c. How would your answer to Part a change if all of Michael's expenses were reimbursed by his employer and he received a check for $11,035 |
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