Certified Relocation Professional (CRP) Practice Exam

If a transferee incurs 20 days of in transit storage that qualifies as a moving expense, what can they do on their federal tax return if not reimbursed?

1. Cannot take a tax deduction

2. Cannot take a storage deduction

3. Can take a tax deduction if itemizes

4. Can take a moving expense deduction from gross income

The correct answer is: Can take a moving expense deduction from gross income

When a transferee incurs in-transit storage expenses that qualify as a moving expense, they may be able to take advantage of specific tax benefits, particularly if they are not reimbursed for those costs. Under the tax laws governing moving expenses, individuals can deduct qualifying expenses from their gross income, thereby reducing taxable income. For individuals who itemize their deductions, this deduction for moving expenses can be quite beneficial, as it provides a direct way to reduce the overall amount of income that is subject to taxation. The key factor here is that the in-transit storage must meet the criteria outlined by the IRS for moving expenses. If the expenses do qualify, then the transferee can effectively deduct those expenses from their gross income when filing their federal tax return. In this context, the alternative choices represent scenarios that do not align with the available tax benefits provided for moving expenses. The notion that a tax deduction is not possible goes against the established rules of moving expense deductions for those who have qualified costs.