Expensing Moving Costs

[Laura Yazdi]

Can I expense my moving costs if I am moving across the country to pursue RE investing full-time in another state? Can I write off BOTH the moving truck that I will hire AND my entire cross-country road trip (hotels, meals, supplies, etc.) to get my car there?

[Michael Plaks]

Quote from @Laura Yazdi:

Can I expense my moving costs if I am moving across the country to pursue RE investing full-time in another state? Can I write off BOTH the moving truck that I will hire AND my entire cross-country road trip (hotels, meals, supplies, etc.) to get my car there?

Here is why there are no responses to your question: it's tricky.

Prior to the 2018 tax reform, there was a deduction for personal moving expenses. Such as when you move for a new job or a new business. This deduction currently identifies as dead.

Now, if you had an operating business, say a factory, in one state and decided to relocate it to another state, moving costs would be deductible.

Your situation is in the gray area. Is there some room for creative interpretation? Possibly. However it would not be something clear-cut, so it comes with risks, restrictions, and it certainly requires a much deeper conversation than we can entertain on this forum.

[Laura Yazdi]

Hello Michael, Thank you for your input and that makes perfect sense. Right now, the purpose of my move is to take my real estate investing business from Los Angeles to Charleston, SC. While I am there I will be meeting with agents, lenders, viewing properties, and being closer to my rental properties once I purchase them to do the check-in, walk-throughs, maintenance, etc.

The other question I run into is what business to put these expenses under. I currently have a California LLC that holds the property I will do a 1031 exchange on next year and purchase properties in South Carolina. That would be the business the moving expenses fall under, correct?

[Account Closed]

Quote from @Laura Yazdi:

Hello Michael, Thank you for your input and that makes perfect sense. Right now, the purpose of my move is to take my real estate investing business from Los Angeles to Charleston, SC. While I am there I will be meeting with agents, lenders, viewing properties, and being closer to my rental properties once I purchase them to do the check-in, walk-throughs, maintenance, etc.

The other question I run into is what business to put these expenses under. I currently have a California LLC that holds the property I will do a 1031 exchange on next year and purchase properties in South Carolina. That would be the business the moving expenses fall under, correct?

Hey Laura, It really depends here I would say that LLC that holds your property paying for moving expenses for you feels a tad aggressive. The purpose of that LLC (I presume) is to hold your property and keep track of expenses and rental income for that property. These moving costs appear to be out of scope of that. Now if you had an operating business like an LLC taxed as an S corp for all your real estate fees etc (not to hold properties, never do that) as an agent, that would make more sense as a write off