Michael graduates from New York University and on February 1, 2015, 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:
Automobile expense enroute (1,000 miles at 23 cents per
mile—standard mileage rate) …………………………………………………… $  230
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 one week in Chicago (hotel and $100 in meals)…. 400
Expenses incurred in decorating the new residence …………………………….. 500
Total expenses ………………………………………………………………….. $11,100
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 $11,100?