CRPA Tax, Legal, & Financial Considerations 2

Question 1

Under IRS rules, which relocation expense is generally excludable from an employee's gross income when paid or reimbursed by an employer?

Accepted Answer

Moving of household goods and personal effects

Answer

After the Tax Cuts and Jobs Act of 2017, only moving expenses for active-duty military members are excludable; however, the historical rule excluded household goods moving costs for qualifying civilian moves.

Question 2

A homesale program that guarantees an employee a minimum purchase price for their home is known as a:

Accepted Answer

Guaranteed Buyout (GBO)

Answer

A Guaranteed Buyout (GBO) provides the employee a guaranteed offer price based on an average of appraisals, protecting against market risk.

Question 3

In a Buyer Value Option (BVO) program, when does the employer technically purchase the employee's home?

Accepted Answer

When the outside buyer makes an offer that the employer matches

Answer

In a BVO program, the employer purchases the home only when an outside buyer presents an offer, which can provide tax advantages by avoiding a direct employer-employee sale.

Question 4

Which federal form must employers use to report taxable relocation benefits paid to employees?

Accepted Answer

Form W-2

Answer

Taxable relocation benefits, including gross-up payments, must be reported on the employee's Form W-2 as wages.

Question 5

A 'gross-up' payment in relocation is designed to:

Accepted Answer

Compensate the employee for additional taxes owed on taxable relocation benefits

Answer

A gross-up compensates the employee for federal, state, and FICA taxes incurred on taxable relocation reimbursements, making the employee 'whole.'

(CRPA) Certified Relocation Professional Appraiser Practice Test

(CRPA) Certified Relocation Professional Appraiser Practice Test

CRPA Tax, Legal, & Financial Considerations 2