I will be moving from LA to the NYC for a new job. Naturally, no concern about the time and distance tests.
However, I will be driving my car to my parents' house in New Orleans and then flying to NYC from there. Is any of this trip deductible?
Options that came to mind:
Deducting the standard mileage rate as if I had driven the most direct route from LA to NYC (if I do this, what records should be maintained for substantiation?)
Deducting what a flight from LA to NYC would have cost if taken on the same date (again, what substantiation records would I need?)
Some hybrid approach?
I have read Publication 521, but it doesn't seem to contemplate travel that occurs by more than one transportation mode. Thanks for any guidance you can give.
I think the trip for LA to New Orleans is not deductible at all. But the entire trip from New Orleans to NYC is -- airfare, and perhaps what you would pay a moving company to move the car.
I think this is the approach if you actually drove from LA to New Orleans to NYC.
I disagree. The deductible amount is what would be deductible if the move were directly from LA to NYC, not the cost of the last leg of the move. Any additional costs associated with the side trip to New Orleans are not deductible. This is all clearly explained in Pub. 521.
Assuming that the car ends up in New Orleans and not NYC, the deductible cost would be the cost of moving the possessions and an airfare from LA to NYC. If the car goes to NYC, then you could use the standard mileage rate for moves (different from the mileage rate for business use) for a direct LA-NY trip instead of the airfare. If the car were shipped to NYC, that expense would be deductible.
Suppose the parents lived in New Jersey, 50 miles from the TP's new home and job. Would you still say the vast majority of the move isn't deductible? (The last portion would be by train.)
I respectfully disagree. You need a car for daily transportation in Kal-E-forn-YA, but not necessarily in No Yawk City. The OP is just moving his car to a separate location. Where is it written that you most take the the most direct route.
directly from LA to NYC, not the cost of the last leg of the move. Any additional costs associated with the side trip to New Orleans are not deductible. This is all clearly explained in Pub. 521.
OK. Then how to you allocate? The quote is
BEGIN QUOTE
Reasonable expenses. You can deduct only those expenses that are reasonable for the circumstances of your move. For example, the cost of traveling from your former home to your new one should be by the shortest, most direct route available by conventional transportation. If during your trip to your new home, you stop over, or make side trips for sightseeing, the additional expenses for your stopover or side trips are not deductible as moving expenses.
END QUOTE
Now his airline ticket is from New Orleans to NYC. It doesn't seem right to look at what you would have paid had you bought a ticket from LA to NYC (which I looked up is about $100 more expensive this time of year). As for the car, will he (a) fly back to pick it and drive it back to NYC, (b) will his parents or friends drive it to NYC, (c) will a professional company move it, (d) will he just sell it in New Orleans, (e) or will he just give it to his parents in New Orleans? For (c) I think the deductible cost should be the actual cost from New Orleans to NYC, not what we would have paid a moving company had be moved from LA to NYC. For (d) and (e) I think the trip is just personal as he is not keeping the car and thus no mileage should be deductible. For (a) and (b) I would say the agree mileage from LA to NYC should be deductible as that's what the publication says.
would be the cost of moving the possessions and an airfare from LA to NYC. If the car goes to NYC, then you could use the standard mileage rate for moves (different from the mileage rate for business use) for a direct LA-NY trip instead of the airfare. If the car were shipped to NYC, that expense would be deductible.
were directly from LA to NYC, not the cost of the last leg of the move. Any additional costs associated with the side trip to New Orleans are not deductible. This is all clearly explained in Pub. 521.
You don't allocate it. You determine what it would have cost for a direct move from LA to NYC. If he spent more than that because of his detour to New Orleans, any extra cost would be non-deductible. If he spent less, his deduction would be limited to the amount actually spent.
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