Tax Q&A: Saving on the Move

Editor's Note: Tracy Byrnes will be answering questions throughout the tax season to help guide you through your return. Please send her an email to ask a tax-related question. She will pick a few each week to answer for all of our readers.

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My husband accepted a job transfer from Michigan to Kentucky in 2005. What items are tax deductible? We were not reimbursed for moving expenses. Our home in Michigan did not sell until August, with the purchase of a home in Kentucky in December. Between March and December we stayed in temporary housing. Are return trips to Michigan deductible? -- B.K.

Tracy Byrnes: Since none of your expenses is reimbursable by your husband's employer, you can deduct the cost of your move on line 26 of your Form 1040. Keep in mind, though, that only the cost of the move from your old home to your new home is deductible. That includes lodging on the way, actual travel costs, packing, crating and transporting your stuff, and even moving your pets.

But you can't deduct the cost of your temporary housing, nor any trips back and forth to check out your new living arrangements.

And one more thing: Your husband has to stay with this new job as a full-time employee for 39 weeks during the first 12 months after you arrive at the new location to make the deduction legit, says Fred Stein, a tax analyst with RIA, a provider of tax information and software to tax professionals.

In a column last year you wrote that Enron stockholders could not claim their stock as worthless in their 2004 filings. Where can I find out if Enron stock is eligible to be declared worthless for 2005 tax filings? -- R.T.

Ah, the never-ending Enron saga. I wish I had better news, but you'd be hard-pressed to find a tax professional who'd tell you the stock is officially worthless.

Here's why. On Nov. 17, 2004, Enron's bankruptcy plan went into effect and all shareholders had to give up their common stock. But instead of just canceling the stock like other bankrupt companies do, Enron decided to give all of its shareholders a piece of a trust. It then said that if any money was left after paying all the claims against the company, the trustholders would receive a distribution.

Granted, the company said it would be highly unlikely that distributions would ever be made. But just the mere fact that trustholders have the right to a distribution is what complicates the analysis, says Stevie D. Conlon, senior tax analyst for CCH Capital Changes, a company that provides coverage of corporate actions affecting publicly traded companies.

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