Moving to India --- can I deduct moving expenses ?

[farfromhome]

Good question FFH. I have specific question - if I rent a car during my last days in USA, will that be deductible expense?

Yes, I too have questions like whether I can claim the Cell Phone Termination charges + cancellation of other memberships (like gym etc) as part of moving expenses. That would total upto 1K (for my wife and I), it might make a difference in the tax returns.

[diva]

we moved to India last february..it was a voluntary R2I .. ,my question is whether we can claim our flight tickets for tax purposes...

[farfromhome]

I was told by the tax consultant that since I didn't move because of a job in India, I cannot deduct moving expenses :angry: . I have asked IRS for clarification.

diva,

probably you can ask your question here. I am in the same boat as you.

http://www.irs.gov/help/page/0,,id=120294,00.html

[okonomi]

The following is at the IRS site. Check out that publication on allocating moving expenses.
[QUOTE]
Allocation Of Moving Expenses

When your new place of work is in a foreign country, your moving expenses are directly connected with the income earned in that foreign country. If all or part of the income that you earn at the new location is excluded under the foreign earned income exclusion or the housing exclusion, the part of your moving expense that is allocable to the excluded income is not deductible.

If your new place of work is in the United States, the deductible moving expenses are directly connected with the income earned in the United States. If you treat a reimbursement from your employer as foreign earned income, you must allocate deductible moving expenses to foreign earned income.

For an explanation and example of how the allocation is done, refer to Moving Expenses in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

http://www.irs.gov/publications/p54/index.html

[back2desh]

gurusw:
Have you R2Ied or still in US?

Good question FFH. I have specific question - if I rent a car during my last days in USA, will that be deductible expense?

[farfromhome]

I was told by the tax consultant that since I didn't move because of a job in India, I cannot deduct moving expenses :angry: . I have asked IRS for clarification.

diva,

probably you can ask your question here. I am in the same boat as you.

http://www.irs.gov/help/page/0,,id=120294,00.html

Here's the response from IRS.

The Answer To Your Question Is:
Thank you for your inquiry dated February 19, 2011. We apologize for the delay in our response. Based on the information you provided, you cannot claim a deduction for moving expenses, because you did not move for the purpose of employment/self-employment or move back to the United States in connection with retirement after foreign employment. In some instances, you may claim moving expenses when you meet certain requirements that are related to the start of work. Please refer to Publication 521, Moving Expenses. Thank you for using this service.


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