Question

In May 2015, after 11 months on a new job, Ken is fired after he assaults a customer. Ken must include in his gross income for 2015 any deduction for moving expenses he may have claimed on his 2014 tax return.

a. True
b. False

Answer 1

The question pertains to whether Ken must include the moving expense deduction he claimed in his gross income after being fired. The answer is true, as the tax code may require the inclusion of this deduction if the employment requirement is not met.

Step-by-step explanation:

The question addresses the topic of gross income and the inclusion of previously deducted moving expenses in gross income upon termination of employment. In general, taxable income is calculated as adjusted gross income minus any deductions and exemptions.

In the context of Ken's situation, where he claimed a deduction for moving expenses in the previous tax year and is now fired after less than one year of employment at the new location, the Internal Revenue Code may require that he include the amount of moving expense deduction in his gross income for 2015.

This is because certain deductions, such as moving expenses, are contingent upon meeting specific requirements, such as remaining employed for a set amount of time.

If he fails to meet those requirements, the deduction may have to be reversed, effectively increasing his gross income for the tax year in which the job was terminated.