TaxFilter. Is the housing market justification enough for a delayed move?

March 16, 2008 9:30 PM

Getting the taxes done, and trying to figure out the real deal about whether my 2007 move passes muster for deductibility. The distance and time tests are no problem, but thanks to the ultra-soft local real estate market, the length of time it took to sell the old house (16.5 months) puts us outside the IRS's one-year (limit? guideline?) to count as "closely related in time." Can I still get some deduction love?

The IRS guideline I'm referring to can be seen here. The examples of extenuating circumstances that justify a delayed (but deductible) move there and in other places on the internet tend to be about family concerns (e.g., staying put until child finishes high school), so I'm not sure how things like "getting saddled with 2 mortgages was not an option" are viewed. I can show that the house was actively being prepared for sale and/or on the market for the entire time. Any concrete knowledge or experience with this situation would be appreciated!

posted by shelbaroo to Work & Money (3 answers total)

When did you start the new job? If you were telecommuting prior to moving, it might be an issue. I think the guidelines specify that you worked (or intended to work) for a specific number of weeks, minimum, post-move. You can claim the move if you started a job when arriving at the new location. They do not want you claiming a job-related move in cases where you quit one job, moved without having any employment prospects in the new location, were unemployed for a period of time, and then started a new job. If you were employed by the new company while living at the old location, then you may have an issue; if you didn't actually begin your new duties until post-move (even if the job was accepted pre-move) then it ought to be OK.

Problem is that you'd need more details here for anyone to be able to give any advice. Did you move, begin working and rent for a while while your family stayed to sell the house? Did you claim anything for job-related moving expenses on your 2006 taxes for a situation like this? Since you can only claim moving expenses once per move, if it doesn't work for 07, can you do a revision for your 06 taxes to claim the deduction?

Given the costs of a move (trust me, I understand, I made two job-related moves in the last two years) this is really worth talking about with a tax professional. Services like H&R Block and TurboTax have hotlines you can call for a fee for these kinds of questions. The cost of doing so is far less than the potential deduction.

There's also always the option of just going for it, and hoping you don't get audited, but that's probably not the safest or most legal advice, is it?
posted by caution live frogs at 7:39 AM on March 17, 2008

Here's a handy piece of tax advice: "when in doubt, deduct it."
posted by thomas144 at 7:45 AM on March 17, 2008

Response by poster: To clarify: I started the job in mid-2006 but did long commutes until the old house sold in 2007, freeing up money for a down payment in new city. I will try the TurboTax hotline and see what they say and post a follow up if I learn anything useful.
posted by shelbaroo at 1:58 PM on March 17, 2008