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Moving Costs

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    Moving Costs

    I am moving to another part of the state. I know that moving costs are deductible if I move and my new job is greater than 50 miles from my old house, in addition to other requirements.

    However, I am a futures & securities trader from home. Does this qualify me to be able to deduct moving costs? I don't commute.

    Moving Expenses

    For moving costs to be deductible, the mileage from the old home to the new work place has to be at least 50 or more miles greater than the distance from the old home to the old work place. For someone who works out of their home, your work place would be the same as your home. So that would simply mean that your new home would have to be 50 or more miles away from your old home.

    The rules require that a taxpayer must be a full-time employee either for at least 39 weeks in the twelve-month period immediately after arriving at the new principal place of work or for at least 78 weeks during the 24 month period immediately after arriving at the new principal place of work. If the taxpayer is self-employed, he or she must perform services on a full-time basis during at least 78 weeks of the first 24 months immediately following his or her arrival at the new place of work. At least 39 of these weeks must fall within the first 12 months following the taxpayer's arrival.

    Note the terms employee and self-employed. The rules do not say that a non-working taxpayer can deduct moving expenses. The rules are tied to an employee or a self-employed taxpayer moving to a new home in order to be able to be closer to a new job. If you are retired and move, that doesn’t count. If you are merely a person living off your investments, that doesn’t count. So a person who lives off his investments would not qualify for moving expenses. You would have to treat your investment activity as a self-employed business in order to deduct moving costs. That means no capital gain treatment on buying and selling. And the trading would have to be extensive, on a daily basis.