Question

Mike Hansen has adjusted gross income of $82,000. During the year, Mike decided he needed a larger home. He purchased a home on a golf course in the same town as his first home. Mike incurred $6,000 in moving expenses. How much of this can he include as an itemized deduction

Answer 1

Answer: $0

Explanation: The total amount of an individual's Gross income which is taxed is called the taxable income. An individual's Adjustable Gross Income may include expenses such as charitable contribution, mortgage interest, medical and some other eligible expenditure which are are deducted in other to lessen the taxable income of such individual. Such deductions are called the Itemized deductions.

However, personal expenses DO NOT CONTRIBUTE to an individual's Itemized deduction and as such, MIKE HANSEN'S ITEMIZED DEDUCTION IS ZERO.

The $6000 incurred is classed under personal expenditure and is not deductible.