Moving Expenses

[S T]

Taxpayer self employed moved from the East coast to the West coast in 2009. No self employed income, but some expenses after the move. Moving expenses for personal would not be deductible as there is no income, however, part of the moving expenses could be allocated to self employed items, such as "research samples, storage, etc" They would appear on a Schedule C which would generate a loss on Schedule C and then produce a NOL.

Time test for self employed is 78 weeks, but this taxpayer has not engaged in any income producing self employed income. Has already in 2009 relocated to West coast for 39 weeks or more.

Would these expenses on Schedule C be viable to produce a loss? Of course the Taxpayer thinks it should be, but it does not seem that the taxpayer has actively engaged in any self employed contracts.

Taxpayer's income in the past has been from grants in a field of research and has not acquired any type of research grants since the relocation.

thanks,

Sandy

[JG EA]

"78 weeks during the fi rst 24 months after the move".So, 104 weeks minus 39 leaves 65 weeks. So perhaps you should throw out the moving expense idea since there is no way.

But things connected with his business would be a different story wouldn't they? What if he relocated in his same area and had to put business supplies in storage. Wouldn't you consider that a business expense? I think I would - if I am thinking correctly.

[S T]

Business Portion

That is what I am thinking, the portion of the moving expenses that can be allocated to "only business" related items such as the transportation, packing and storage expenses of these "precious" research materials - some of which have to be temparature controlled.

The problem that I am having is that taxpayer, hasn't actually been engaged in actively seeking any self-employment contracts. She is in research and studies that are funded by grants, and hasn't even completed her "doctorate papers" that are needed to satisfy her grants. Her grants/contracts all terminated in 11/08 a few months prior to the move.

So I guess my real question is whether or not on her move from the East Coast to the West Coast is whether nor not she really is self employed?

Sandy

[Gretel]

I would feel uncomfortable allowing any moving expenses if taxpayer doesn't make any effort to be in business again. A question I would ask is the motivation for making the move.

[S T]

Thanks

Thanks JG and Gretel for posting and I am always so glad that you are there for the "water cooler" discussion.

After a conversation with the taxpayer and laying out what she might need to furnish for "actively seeking" self employment issues on the move, she finally conceded to not claiming any expenses - all of which would have been a mute point on the 2009 tax return, and slight NOL carryback/carryforward for some "what maybe" could be SE related Schedule C expenses.

Of course she doesn't think it is fair, however, I also know from family sources she has not given the most earnest effort in seeking any type of self employment income during 2009.

I can take a deep breath on this one and feel I did the best I could do in counseling the TaxPayer and also for not having to file a return with the "questionned expenses"

Makes me smile,

Sandy