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the Embassy Suites for 3 months. The hotel was located in the
same vicinity as petitioner’s new place of work, and, during her
stay, petitioner worked full time for Authentic Fitness at the
new location. Petitioner’s extended stay at the Embassy Suites
while working at Authentic Fitness’s new location amounted to a
new place of residence. Therefore, petitioner was not entitled
to deduct the $8,241.24 paid to the Embassy Suites by Authentic
Fitness.
Authentic Fitness included the $8,241.24 it paid Embassy
Suites as wages on petitioner’s Form W-2, and it also paid her an
additional $7,464.34 identified as “Total Tax Liability Gross-
Ups”.2 Respondent argued that, because petitioner received the
additional payment from Authentic Fitness, she was no longer
entitled to a moving expense deduction. The Court disagrees.
Petitioner did not receive a double tax benefit because of
the additional payment from Authentic Fitness, nor did she lose
her entitlement to a deduction merely because Authentic Fitness
decided to term the payment “Total Tax Liability Gross-Up”. The
payment was the equivalent of a bonus, paid in connection with
her employment, and thus constituted compensation for services
2 Petitioner alleged she never received the additional
$7,464.34 labeled “Total Tax Liability Gross-Up” on Authentic
Fitness’ Employee Relocation Expenses Worksheet and included on
her Form W-2. The Form W-2 reflects she did receive the amount,
and the Court accepts that as true. Moreover, petitioner
included the amount on her 2001 Federal income tax return after
receiving the worksheet from Warnaco listing this payment.
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Last modified: May 25, 2011