Question

Maxine is a gunnery sergeant in the U.S. Marine Corps. In May of 2022, her duty station changed from the Marine Barracks Washington, D.C., to Camp Lejeune in North Carolina. She drove 348 miles and spent 1,150 to move her household items. Maxine also incurred closing costs of1,040 when she sold her home in her former city. She received this Form W-2 reporting her moving expense reimbursement. Choose the response that correctly identifies the amount of Maxine's moving expense deduction.

1) $1,150
2) $1,040
3) $2,190
4) Cannot be determined

Answer 1

Maxine's moving expense deduction would be $1,150, which is the amount she spent to move her household items. Closing costs from selling her home are not deductible as moving expenses.

Step-by-step explanation:

The question asks us to determine the amount of Maxine's moving expense deduction after her duty station changed and she had to move from Washington, D.C., to North Carolina. Per the Internal Revenue Service (IRS) rules in effect for the 2022 tax year, active duty members of the Armed Forces moving due to a permanent change of station can deduct unreimbursed moving expenses. These expenses include the cost of moving household goods and travel expenses from the old home to the new one but do not include any expenses related to the sale or purchase of a home (such as closing costs).

Since Maxine spent $1,150 to move her household items and incurred $1,040 in closing costs when selling her home, only the moving expenses can be deducted. Therefore, the correct response is $1,150, which represents the amount she spent to move her household items. The closing costs are not deductible as a moving expense.