Due to a merger, Allison transfers from Miami to Chicago.Under a new job description, she is reclassified from employee to independent contractor status.Her moving expenses, which are not reimbursed, are as follows: $$\begin{array}{l}
\begin{array} { l r }
\text { Transportation } & \$ 1,400 \
\text { Meals } & 400 \
\text { Lodging } & 500 \
\text { Cost of moving household goods } & 4,000 \
\text { Penalty for breaking lease on Miami } & 3,000
\end{array}\
\text { apartment }
\end{array}$$ ? Allison's deductible moving expense is:

Question

Due to a merger, Allison transfers from Miami to Chicago.Under a new job description, she is reclassified from employee to independent contractor status.Her moving expenses, which are not reimbursed, are as follows: $$\begin{array}{l}
\begin{array} { l r } 
\text { Transportation } & \$ 1,400 \
\text { Meals } & 400 \
\text { Lodging } & 500 \
\text { Cost of moving household goods } & 4,000 \
\text { Penalty for breaking lease on Miami } & 3,000
\end{array}\
\text { apartment }
\end{array}$$ ? Allison's deductible moving expense is:

Quizplus · Accepted Answer

Allison's deductible moving expense is $5,900. This is because the IRS allows a deduction for moving expenses that are incurred within one year of the move and that are related to starting work at a new job. The deductible moving expenses include the cost of transportation, meals, lodging, and the cost of moving household goods. The penalty for breaking the lease on the Miami apartment is not deductible.

Due to a Merger, Allison Transfers from Miami to Chicago