Problem: Vaughn is an employee of Rollings, Incorporated and was transferred from its Seattle office to its San Jose office. Vaughn incurred $18,000 of moving expenses to relocate household items to San Jose. Which of the following statements is true? If Rollings paid an $18,000 moving allowance, Vaughn must include $18,000 in gross income. If Rollings paid a $12,000 moving allowance, Vaughn is allowed a $6,000 itemized deduction for moving expenses.