Dispelling 5 Common Myths of U.S. Domestic Relocation

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.

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