Mr. and Mrs. JN moved from Lincoln, Nebraska to Kansas City, Missouri so that Mr

Question

Mr. and Mrs. JN moved from Lincoln, Nebraska to Kansas City, Missouri so that Mr. JN could take a job with the HM Company. As part of his employment agreement, Mr. JN received a $7,500 moving expense allowance. What is the effect of this $7,500 cash receipt on Mr. and Mrs. JN’s AGI assuming that:

a) Their deductible moving expense was $5,200? (Above the line deduction or additional income and how much?)

b) Their deductible moving expense was $9,000? (Above the line deduction or additional income and how much?)

Explanation / Answer

a) Their deductible moving expense was $5,200? (Above the line deduction or additional income and how much?) Ans) Total Moving allowances $         7,500 Less Deductable Expenses $       (5,200) Total additional income $         2,300 b) Their deductible moving expense was $9,000? (Above the line deduction or additional income and how much?) Ans) Total Moving allowances $         7,500 Less Deductable Expenses -9000 $       (1,500) Total additional income taxble 0

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