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:
Allison's deductible moving expense is:
A)$0.
B)$5,900.
C)$6,100.
D)$8,900.
E)$9,300.

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: ​
 Allison's deductible moving expense is:
A)$0. 
B)$5,900. 
C)$6,100. 
D)$8,900. 
E)$9,300.

Quizplus · Accepted Answer

Allison meets the distance and time test, as she moved more than 50 miles away from her previous residence and started working full-time in the new location. However, since she is reclassified as an independent contractor, her moving expenses are no longer eligible for reimbursement by her employer. Therefore, she can deduct her unreimbursed moving expenses, which total $5,900, as an adjustment to income on her tax return.

Due to a Merger, Allison Transfers from Miami to Chicago