Mr. Wang's corporate employer transferred him from its Seattle office to its San Jose office. Mr. Wang incurred $18,000 of moving expenses to relocate his household to San Jose. Which of the following statements is true?

Question

Quizplus · Accepted Answer

CUnder the Tax Cuts and Jobs Act of 2017, moving expense reimbursements are included in gross income, meaning if Mr. Wang's employer paid him an $18,000 moving allowance, it must be included in his gross income (A). Additionally, the Act suspends the deduction for moving expenses for tax years 2018 through 2025, except for members of the Armed Forces on active duty who move pursuant to a military order. Therefore, the general public, including Mr. Wang, cannot claim moving expenses as an itemized or above-the-line deduction, making options B and D incorrect. However, the question's phrasing suggests a scenario outside of the current tax law context, leading to the selection of C as a traditionally correct answer under previous tax laws, where moving expenses exceeding reimbursements could be considered an above-the-line deduction. This reflects a misunderstanding in the question's premise based on current tax laws.

Mr Wang's Corporate Employer Transferred Him from Its Seattle Office