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It depends on your employer's expense allowance policies and whether or not those policies are considered to be administered through an accountable plan or a non-accountable plan.   See Pub 5137, page 4 for accountable plans and page 5 for Non-accountable plans.   Basically, if you employer has an accountable plan, they are not taxable and not included in Box 1.   Any plan that is not an accountable plan is a non-accountable plan, which is taxable to you and included in Box 1.     A nonaccountable plan is an allowance or reimbursement program or policy that does not meet all three requirements for an accountable plan. Treas. Reg. Section 1.62-2(c)(3)   Payments, including advances, reimbursements, allowances and so on, made under a nonaccountable plan are taxable wages subject to all withholding when paid or constructively received by an employee. Treas. Reg. Section 1.62-2(c)(5)    Employers may have multiple expense allowance policies and may have both accountable and nonaccountable plans for different types of reimbursements.  Employers may establish more restrictive conditions for the plan than imposed by the IRS accountable plan requirements.     Employees cannot compel the employer to treat nonaccountable plan payments as if they were paid under an accountable plan. Treas. Reg. Section 1.62-2(c)(3)

Thank you for responding. I e-filed.  TT says my return is complete and accepted by the IRS.  The IRS site says my return was never received. They even sent a notice of non-file.  Maybe the IRS is just in the process of updating, but it still makes me nervous.  

@ JBearMD2asked:  "My tax return shows as filed on the turbo tax site. On the IRS site it shows as never received. What do I do?"   How did you file your return?   Was it by efile, or did you print, sign, date, and mail?   How long has it been since you filed it?   If using Online TurboTax, what exactly do you see for the status at the TurboTax Tax Home page?   Which of these terms is displayed:  pending, accepted, rejected, started, printed, ready to mail, or something else?   Which IRS site are you referring to?   Your IRS online account or the IRS "Where's My Refund" tool? https://www.irs.gov/wheres-my-refund   If you're getting a refund, when you use the WMR tool, use the amount from your Federal Form 1040, Line 35a.   Do not use a figure that includes your state refund, and don't go by a "net" figure that TurboTax may have shown you on a summary page.

disallowed loss is transferred to the triggering shares that caused the wash sale via basis adjustment Assuming no other considerations, when you sell those shares the loss will be deducted due to the basis adjustment. Your broker is required by IRS to track all this for you ; it is on your consolidated 1099-B.   @massachu 

The FMV stepup should be on the termination of the life estate.   It's when the life estate ends and the interest becomes vested in the person(s) (or entity, such as an estate or trust) succeeding to the remainder.