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Anonymous
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We did not move within 1 year of starting a new job because it took 18 months to sell the house, can we still deduct moving expenses?

We put our house on the market while I was unemployed, I started a new job 5 months later, but it took another year to sell the house.  We moved 13 months after starting the new job, because it took so long to sell.  I have worked that job for 18 months.  Can we take a deduction for the moving expenses?

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JulieCo
New Member

We did not move within 1 year of starting a new job because it took 18 months to sell the house, can we still deduct moving expenses?

It depends.  First of all, there are three tests that must be met in order to deduct moving expenses:  Distance Test, Time Test, and then the Closely Related to the Start of Work test, which is what you are asking about here.  It appears you have met the Time Test of working in your new location for 39 weeks, and if you meet the distance test (outlined below), then you may be able to deduct expenses with an exception to the Closely Related to Start of Work test.  See more detail in the exception information noted below.

Per IRS Publication 521 (Moving Expenses) in most cases, you can consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. It isn't necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location.  

Exception:  If you don't move within 1 year of the date you begin work, you ordinarily can't deduct the expenses unless you can show that circumstances existed that prevented the move within that time.

Example:

Your family moved more than a year after you started work at a new location. You delayed the move for 18 months to allow your child to complete high school. You can deduct your moving expenses.

For more information, see this link:  https://www.irs.gov/publications/p521#en_US_2017_publink1000203444

Distance Test:  The distance between your new job and your former home must be at least 50 miles farther than your previous employer is from that home. For example, if your previous commute to work was five miles each way, then the distance from your new job location to your old home must be at least 55 miles. When evaluating whether you satisfy the distance test, the IRS requires you to use the shortest commutable routes between two locations.

Here is a related TurboTax Article on Moving Expense Deductions:  IRS Moving Expense Deductions 

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2 Replies
JulieCo
New Member

We did not move within 1 year of starting a new job because it took 18 months to sell the house, can we still deduct moving expenses?

It depends.  First of all, there are three tests that must be met in order to deduct moving expenses:  Distance Test, Time Test, and then the Closely Related to the Start of Work test, which is what you are asking about here.  It appears you have met the Time Test of working in your new location for 39 weeks, and if you meet the distance test (outlined below), then you may be able to deduct expenses with an exception to the Closely Related to Start of Work test.  See more detail in the exception information noted below.

Per IRS Publication 521 (Moving Expenses) in most cases, you can consider moving expenses incurred within 1 year from the date you first reported to work at the new location as closely related in time to the start of work. It isn't necessary that you arrange to work before moving to a new location, as long as you actually go to work in that location.  

Exception:  If you don't move within 1 year of the date you begin work, you ordinarily can't deduct the expenses unless you can show that circumstances existed that prevented the move within that time.

Example:

Your family moved more than a year after you started work at a new location. You delayed the move for 18 months to allow your child to complete high school. You can deduct your moving expenses.

For more information, see this link:  https://www.irs.gov/publications/p521#en_US_2017_publink1000203444

Distance Test:  The distance between your new job and your former home must be at least 50 miles farther than your previous employer is from that home. For example, if your previous commute to work was five miles each way, then the distance from your new job location to your old home must be at least 55 miles. When evaluating whether you satisfy the distance test, the IRS requires you to use the shortest commutable routes between two locations.

Here is a related TurboTax Article on Moving Expense Deductions:  IRS Moving Expense Deductions 
Anonymous
Not applicable

We did not move within 1 year of starting a new job because it took 18 months to sell the house, can we still deduct moving expenses?

Thanks Julie.  I do pass the distance test (distance went from 56 miles to 2 miles), but I guess I'm still concerned with the Time Test.  I've worked in the new job for 18 months, but only about six months since the move, nowhere near the 39 week requirement.  Do you think that will be a problem?  I think that the inability to sell the house quickly is likely to qualify as an exception to the Closely Related to Start of Work Test.  Thanks,
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