I’ve received a 1099-misc for $7000. This was from the bank for reimbursement of moving expenses. Can I offset the income with the moving expenses?

[deadhead10918]

I did a bankruptcy in 2012.  The mortgage was discharged in2017 I proceeded with a “deed in lieu of foreclosure” to return the property.  This occurred in late 2017

[Opus 17]

You might qualify for a moving expense deduction in whatever year you moved, if you meet the ordinary time and distance rules. (Must move in order to take a new job that is more than 50 miles away from your old home, must work at least 39 weeks at that new job.)  You can take this deduction if you qualify, as long as you pay with taxable money (aren't reimbursed by your new employer tax-free).  And that has nothing to do with whether the bank paid your expenses to get you out of the house or not.

But there is no special deduction for having your moving expenses paid by the bank as part of a foreclosure.

Also, cancelation of debt when you foreclose on your main residence is excludable from taxable income in most cases. This expired at the end of 2016 but was restored for 2017 in the budget passed Feb 8, 2018.  I'm not sure if the function has been added back to turbotax yet.

[MichaelDC]

Yes. You may qualify for moving expenses, but this is not a function of your reimbursement. If you receive a Form 1099-MISC for the relocation assistance/incentive payment, you must report it on your tax return - exactly as it is filled out by the issuer. 

Relocation assistance is taxable. It won't be self-employment income, but needs to be entered in the Income from Form 1099-MISC interview. The income is not compensation for service, not related to your main job and not from an intent to profit.

One requirement to be able to deduct moving expenses involves the distance between your new workplace and your old home. To claim your moving costs, your new place of employment must be at least 50 miles farther away from your old home than your old place of employment. As an example, if you lived in a home that was 20 miles away from your old job, you’ll have to take a job at a new company that is at least 70 miles away from your old home to qualify for the deduction.

If you qualify (TurboTax will help you decide), here is how to report moving expenses:

• Go to Federal
  
• Click on Deductions and Credits
• Click on I'll choose what I work on (if shown)
• Scroll down to Other Deductions and Credits
• On Moving Expenses, click on the start or update button

Please feel free to post any additional details or questions in the comment section.