Tax Answers

February 09, 1994

Here are answers from members of the Maryland Association of Certified Public Accountants to reader tax questions. The Baltimore Sun will publish answers through April 15.

Q: I live in Harford County and work in Baltimore City. Can I deduct my everyday traveling expenses to get to my job?

A: No, you may not deduct your ordinary commuting expenses for tax purposes. Commuting is defined as the travel between an individual's home and his or her regular business location. If you go on a temporary work assignment beyond the general area of your home, however, you may deduct the expenses of the daily round-trip transportation if you are not reimbursed by your company.

Q: I purchased Wang Laboratories stock as far back as 1978. The company went into bankruptcy and as part of its reorganization plan has issued new common stock and canceled the older issues I held. Can I deduct the amount I've paid for these shares?

A: No, a deduction is not allowed for the amount paid for the canceled older issues. Generally, when stock is received as a result of a corporate reorganization due to bankruptcy, and the other issues held are canceled, it is a nontaxable exchange of stock for stock. The new stock replaces the canceled stock and "acquires" the canceled stock's characteristics such as date purchased and cost basis. The amount paid for the shares will be deductible when the stock is sold or otherwise disposed of or is deemed worthless.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.

Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.

To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after the greeting.

Written queries may be sent to TAX QUESTIONS, The Baltimore Sun, Business News Department, 501 N. Calvert St., Baltimore, Md. 21278. Fax questions to The Sun's Business News Department at (410) 783-2517.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.