relocation expense

[lefowl]

What is the name of your state? California

I am moving from California to Colorado and want to know if I purchase a trailer to move and store my classic car and other household items, may I deduct the expense on my taxes?

[LdiJ]

Originally Posted by lefowl

What is the name of your state? California

I am moving from California to Colorado and want to know if I purchase a trailer to move and store my classic car and other household items, may I deduct the expense on my taxes?

No, but you can deduct the mileage at the "moving" mileage rate of 18 cents per mile.

[abezon]

I disagree. The law allows you to deduct the cost of transporting goods & people. You can also deduct 1 months' storage at the new location as a moving expense. You could deduct the cost of the trailer if it was reasonable to buy instead of renting a U-Haul, especially if you sell the trailer when you get to CO. For example, you may need to make multiple trips, professional movers may be extra expensive because of the nature of your stuff, etc. However, if you deduct the cost of the trailer, you will have $0 basis & any proceeds from sale will be taxable. Get some moving quotes & compare them to the cost of a trailer.

You can deduct 18 cents/mile for driving your own car to CO. Alternatively, you can deduct the actual cost of gas if it's over $.18/mile.

[LdiJ]

Originally Posted by abezon

I disagree. The law allows you to deduct the cost of transporting goods & people. You can also deduct 1 months' storage at the new location as a moving expense. You could deduct the cost of the trailer if it was reasonable to buy instead of renting a U-Haul, especially if you sell the trailer when you get to CO. For example, you may need to make multiple trips, professional movers may be extra expensive because of the nature of your stuff, etc. However, if you deduct the cost of the trailer, you will have $0 basis & any proceeds from sale will be taxable. Get some moving quotes & compare them to the cost of a trailer.

You can deduct 18 cents/mile for driving your own car to CO. Alternatively, you can deduct the actual cost of gas if it's over $.18/mile.

Ok..I am not going to disagree with you entirely. However, I did have a client who went this route and lost in an audit. However, my client didn't dispose of the trailer after the move. The IRS allowed the mileage for multiple trips, but denied the cost of the trailer based on the fact that it was kept for future use.

[jgombos]

It's interesting that disposal of the trailer makes a difference here.

I'm trying to relate this to my situation, where I'm considering buying a 300 dollar crate in order to load a motorcycle onto a moving truck. Assuming the crate is deductible on a tax deductible move, do I have to dispose of the crate after the move? I would be tempted to use it on future moves. Also, what's the criteria for determining whether moving materials must be resold in order to deduct?

[LdiJ]

Originally Posted by jgombos

It's interesting that disposal of the trailer makes a difference here.

I'm trying to relate this to my situation, where I'm considering buying a 300 dollar crate in order to load a motorcycle onto a moving truck. Assuming the crate is deductible on a tax deductible move, do I have to dispose of the crate after the move? I would be tempted to use it on future moves. Also, what's the criteria for determining whether moving materials must be resold in order to deduct?

You do realize that the tax savings on a 300.00 deduction is fairly minimal? In any case, a crate would likely be viewed as a moving "supply" rather than a capital asset. A trailor is a capital asset rather than a supply.