Final answer:
To deduct moving expenses under IRC § 217, two tests must be met: the Time Test and the Distance Test. These ensure employment in the new location for at least 39 weeks.
Step-by-step explanation:
To deduct expenses pursuant to Internal Revenue Code (IRC) § 217, known as the moving expenses deduction, two main tests must be met.
The Time Test requires the taxpayer to be employed full-time for at least 39 weeks within the first 12 months of relocating. The employment should be within the same geographical area as the new home.
The second test is the Distance Test, which stipulates that the new workplace must be at least 50 miles farther from the taxpayer's old home than the old workplace was.
For example, if your old job was 10 miles from your old home, your new job must be at least 60 miles from your old home to qualify. Deductions can include expenses such as the cost of packing, shipping possessions.
And travel and lodging expenses incurred during the move. These tests ensure that the expenses are associated with the start of work at a new location and are fundamental in determining the eligibility for this tax deduction.