Tax deductions for moving

As 2007 wraps up, many of us are getting our records in order in preparation for tax day, April 15, 2008. If you are one of those people, and you have made a move this year, you are probably wondering if there are any allowable tax deductions. So….here is the answer.

The IRS does allow tax deductions for moves which were made to accommodate a job in a new location. There are, however, two tests which must be met in order to qualify for deductions.

Test 1: Distance TestTo qualify for a deduction, your new principal workplace must be at least 50 miles farther from your previous home than your old workplace was from that same home. In other words, if the commute to your old workplace was 3 miles, your commute from your previous home to your new workplace must be at least 53 miles. If you did not have a job before moving, then your new job must be at least 50 miles from the previous home.

Test 2: Time TestIn addition, you must work full time in the general area of your new workplace for at least 39 weeks during the 12 months right after you move. There are exceptions to the time test and other rules apply if you are self-employed. Check with your tax advisor or check out Form 3903 on the IRS website for details. If you have passed both the distance and time tests you may be able to deduct:
Costs for packing, crating and movement of your household goods
Up to 30 days of storage and insurance for household goods

Transportation and lodging expenses (not meals)You may not deduct expenses that have already been reimbursed by your employer and you may not deduct sightseeing or house hunting trips.

Building Industry Report for October 2007

New-home sales dropped 45.6 percent in California while median new-home prices fell 10.8 percent in October compared to October 2007, the California Building Industry Association and Hanley Wood Market Intelligence reported last week.

The groups reported 3,292 new-home sales statewide for all new-home types in October, down from 6,047 sales in October 2006, according to the report. The median price across all new-home types was $405,900, down from $455,000 in October 2006.
Single-family new-home sales fell 37 percent, from 4,075 in October 2006 to 2,568 in October 2007, while the median price of single-family new homes fell 12.9 percent, from $461,400 in October 2006 to $401,990 in October 2007.

Among those market areas with more than 100 sales in October, sales for all new-home types fell 75 percent in Sacramento compared to October 2006 and dropped 54.1 percent in Santa Ana-Anaheim-Irvine, 51 percent in San Diego-Carlsbad-San Marcos, 47.6 percent in Bakersfield, 41.4 percent in Los Angeles-Long Beach-Glendale, 34.5 percent in Oakland-Fremont-Hayward, 28.6 percent in Riverside-San Bernardino-Ontario and 10.7 percent in Fresno.

New condo sales dropped 70.6 percent in California year-over-year in October, falling from 1,481 in October 2006 to 436 in October 2007. And the median price of new condos in the state dropped 1 percent, from $415,000 in October 2006 to $411,000 in October 2007.
Jonathan Dienhart, director of published research for Manley Wood Market Intelligence, said in a statement, "There doesn't currently seem to be an end in sight in regards to the problems in the mortgage industry. The market must once again find equilibrium; that can only happen when more home buyers gain access to credit again, and home prices have relaxed to the point where they can still qualify for a mortgage under more strict lending guidelines."He added, "If potential home buyers are convinced it's a bad time to purchase a house, there is only so much that pricing and credit options are going to help. Consumers need to regain their confidence regarding housing before we will see widespread recovery."