Question

In November 2015, Katie incurs unreimbursed moving expenses to accept a new job. Katie cannot deduct any of these expenses when she timely files her 2015 income tax return since she has not yet satisfied the 39-week time test.

a. True
b. False

Answer 1

The statement is false because the IRS allowed taxpayers to claim moving expenses deductions in advance of meeting the 39-week time test if they expected to fulfill the requirement in the 12 months following their move. The correct option is b.

Step-by-step explanation:

According to the Internal Revenue Service (IRS) tax laws in place for the year 2015, moving expenses could be deducted if certain conditions were met.

One of these conditions was the 39-week time test, which required the taxpayer to work full-time for at least 39 weeks during the first 12 months immediately following their move.

On the face of it, the statement that Katie cannot deduct any of these expenses on her 2015 income tax return because she has not met the 39-week time test might seem true.

However, there is an exception that allowed taxpayers to claim the deduction in advance if they expected to meet the test in the subsequent period. Katie can indeed claim her moving expenses in 2015 as long as she meets the 39-week test in the 12 months after her move. The correct option is b.