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On November, 15, 2020, Mr. John Havlik moves from Halifax, NS to Moncton, NB (Moncton is 260 kilometers from Halifax) in order to start a

On November, 15, 2020, Mr. John Havlik moves from Halifax, NS to Moncton, NB (Moncton is 260 kilometers from Halifax) in order to start a new job. He lived in a rented apartment in Halifax, but has purchased a house in Moncton. John incurs the following expenses related to his move:

  • Legal fees and other costs associated with the acquisition of the Moncton house totaled $3,250
  • The total cost for the moving company to transport Mr. Havlik's personal possessions is $8,300
  • He spent $650 on a house hunting trip to Moncton, but he did not decide on a house until his return to Halifax
  • He incurred a $1,200 penalty for breaking his lease in Halifax.

During the year, Mr. Havlik's salary totaled $53,000, of which $6,625 was earned after November 15, 2020 (i.e. this amount represents the income earned at the new employment). His new employer is not providing any allowance or reimbursement for Mr. Havlik's moving costs.

Note: In this question, do not worry about adding a negative sign to your inputs.

Required:

A. Indicate which moving expenses are deductible in the table below by entering the deductible amount in the spaces provided. If an amount is not deductible, enter the number 0.

Moving Expense: Deductible Amount:
Legal fees on acquisition of new house
Transportation of personal possessions
House Hunting Trip
Lease Cancellation Penalty
Total Deductible Moving Expenses

B. How much can Mr. Havlik deduct in moving expenses in the 2020 taxation year? $

C. If Mr. Havlik was reimbursed of his house hunting trip cost by his new employer, would that create a taxable benefit to him? Yes or No

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