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

Quizplus · Accepted Answer

Allison can deduct her moving expenses since she moved due to a change in her job location caused by her employer. However, as an independent contractor, she cannot deduct any expenses as a business expense, and therefore her moving expenses are considered personal expenses. The expenses are below the limit of $5,900 of deductible expenses for a move as a result of a job change. Therefore, the maximum deductible moving expense for Allison is $5,900.

Due to a Merger,Allison Transfers from Miami to Chicago