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Use IRS Publication 521 and California 540A / 540 Booklet to complete this topic.
Prepare Form 1040, Form 3903 and California Form 540 .
Brad Johnson is married and has no children. He owned his home in Florida where he worked. On December 8, his employer told him that he would be transferred to San Diego as of January 20, 2007.
His wife, Samantha (SSN 610-25-3940), flew to San Diego on January 2 to look for a new home. She put a down payment of $25,000 on a house being built and came back to Florida on January 8, 2007. The Johnsons sold their Florida home for $1,500 less than they paid for it. The home was free and clear by the time the construction was completed.
They contracted to have their personal effects moved to San Diego on January 15, 2007. The family arrived in San Diego January 18, 2007 only to find out that their new home was not yet completed. They stayed in a nearby motel awaiting completion of the house until February 12th.
On January 20, 2007, Brad went to work in the San Diego plant where he works to the present time.
Their records for the move show:
1). Samantha's pre-move house hunting trip:
 | Travel and lodging..........................$649. |
| Meals...........................................$95. |
2). Down payment on San Diego home.......$25,000.
3). Real estate commission paid on sale
| of their Florida home......................$3,500. |
4). Loss on sale of Florida home (not
| including real estate commission)......$1,500. |
5). Amount paid for storing and moving personal
| effects (furniture, household etc)......$6,515. |
6). Expenses of driving to San Diego:
| Mileage (Start 14,278; End 16,478) |
| Lodging ..............................$360. |
| Meals..................................$640. |
7). Cost of temporary living expenses in San Diego:
| Motel rooms..........................$1,050. |
| Meals..................................$2,280. |
| They stayed in a motel for 25 days. |
Brad was reimbursed $5,749 under an accountable plan as follows:
| Moving personal effects...............$4,500. |
| Travel (and lodging) to San Diego....$600. |
| Travel (and lodging) house hunting...$649. |
| Total reimbursement..................$5,749 |
The employer included this reimbursement on Brad's Form W-2 for the year. The reimbursement of deductible expenses, $5,100 for moving household goods and travel to San Diego, was included in Box 12 of Form W-2. His employer identified this amount with code P.
The employer included the balance, $649 reimbursement of nondeductible expenses, in box 1 of W-2 with Brad's other wages. The employer withholds taxes from the $649 which is also included in W-2.
Have your return prepared and ready to answer the questions.
Option 1: Complete Quiz online.
Instructions to submit quiz successfully: Step-by-Step check list
When prompted for your name, please enter your CTEC or Preparer Number (if you have a number) with your name as follows: First, last name, Number (e.g. John Smith A012345 / John Smith P012345)
Option 2: Complete and mail answer sheet.
If you choose not to complete the quiz by pressing "Start quiz" above, you can print questions and answer-sheet to mail to us. If you complete the online quiz, the advantage is that you get an automatic score as apposed to waiting for a response on a manually graded quiz. You can also print the questions and answer sheet and after you answered the questions on paper submit it online by choosing "Start Quiz" above. Please don't sent answer sheet by certified mail.
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Please Note: You must also complete the tax return for this assignment. If you turn in incomplete work, such as purposely not answering the questions regarding the return you prepared, you will not be given credit for the topic.
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