Luke incurs $4,000 of deductible moving expenses in the current year and is full
ID: 2551555 • Letter: L
Question
Luke incurs $4,000 of deductible moving expenses in the current year and is fully roimbursed by his employer in the same year How are the expense deduction and the reimbursement reported on Luke's tax return if he uses the standard deduction? b. What tax consequences oocur if the reimbursement is $4,000 but only $3.200 of the $4,000 of moving expenses are tax deductible? are the deduction and the reimbursement reported or ax return O A. Luke's moving expenses are deductible for AGI so that it does not matter whether Luke uses the standard deduction. The $4,000 reimbursement would offset the $4,000 of moving expenses. Thus, no amount wou'd be reported on Luke's tax retum. O B Luke's moving expenses are deductible or AGI on i Luke uses the standard deduction. The S4,000 reimbursement would offset the $4 000 o movin expenses. Thus, no arno nt would be reported on Luke's a return. C. Luke's moving expenses are deductible from AGI so that it does notrna er whether Luke uses the standard deduction. The $4,000 reimbursement would offset the 4,000 o moving expenses. Thus no amount would be reported on Luke's tax return D. Luke's moving o penses aro not deducible for AGI if Luke uses the standard deduction. The S4,000 ri bu soment would be included in Lukos gross nco me on his tax return b. What tax consequences occur if the reimbursement is $4,000 but only $3.200 of the $4,000 of moving expenses are tax deductible? 0 A. O B. O C. O D. The reimbursement for moving expenses of $4,000 must be included in Luke's gross income. The reimbursement for nondeductible moving expenses of $800 must be included in Luke's gross income. The $3.200 reimbursement would offset the $3.200 of moving expenses. Thus, no amount would be reported on Luke's tax retum. The reimbursement for moving expenses of $3,200 must be included in Luke's gross income.Explanation / Answer
A reimbursed expense is included in gross income and deductible for adjusted gross income (AGI). If an accounting plan is made, then the taxpayer should not include the amount in gross income or deduct the amount in deductions.
a. Option A
b. Option B
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