View
148
Download
2
Tags:
Embed Size (px)
Citation preview
U.S. Domestic Relocation
Dispelling 5 CommonMyths
WHR Group
RELOCATION COMPANIESMAKE MONEY BUYING AND
SELLING HOUSES
1.
Relocation companies provide amarket-based offer for an employee’s homebased on the appraisal criteria set forth by
the Worldwide ERC.
Relocation home sale expertise
Priced to sell
IRS compliant
Typically, two appraisals are ordered fromindependent appraisers, and the results are
averaged for an offer on the employee’s home.
$208,000
$203,000/2$205,500 buyout
+=
Relocation companies do not make a profiton buying and selling the home but rather are
paid a fee for services regardless of theproperty’s eventual sales price.
IF A RELOCATION COMPANYMAKES PAYMENTS TO VENDORS,
IT ’S NOT A TAXABLEREIMBURSEMENT TO THE
EMPLOYEE
2.
All payments made on behalf of an employeeto a vendor can be considered taxable income
to the employee.
Exceptions to this are...
Household goods move costs
Final move costs to thedestination
Any costs associated with aqualified Home Sale program
HOME SALES ARE TAXABLE IFTHEY DON’T MEET THE IRS
“50 MILE” TEST
3.
Home sales fall under a differentIRS tax ruling than other relocation
expenses
(specifically Revenue Ruling 72-339)
While these other relocation
expenses use the 50-mile test to
determine tax protection, the test
does not apply to home sale
programs
[Organizations can handle home sales likeany other business expense]
SHORT-TERM ASSIGNMENTSLASTING LONGER THAN 365
DAYS DO NOT NEED BENEFITSTAXED UNTIL
DAY 366
4.
Short-term assignments less thanone year are treated like any other
business trip.
HOWEVEROnce an assignment
is required beyond 365 days in duration, travel reimbursements are taxable.
RELOCATION COMPANIES ’SERVICE PROVIDER FEES CAN
VASTLY REDUCE ANORGANIZATION’S RELOCATION
SPEND
5.
Provider fees typically account for only
3 - 5% of relocationspend
(While a small amount in comparison to total cost, these fees canreap great rewards in cost savings, program structure, and ensuring
tax compliance.)
WHR Group helps transferring employees bymaking moves simple, smooth, and enjoyable.
www.whrg.com/news for more!