CRPA Tax, Legal, & Financial Considerations 3

Question 1

In a relocation appraisal context, 'anticipated sales price' (ASP) differs from market value primarily because it:

Accepted Answer

Reflects the likely price achievable within a specific corporate timeframe

Answer

ASP accounts for the time constraints of a corporate relocation sale, which may differ from the broader market value achievable with unlimited exposure time.

Question 2

Which legal concept protects a relocation management company that purchases a home from an employee and resells it from double-transfer-tax liability in many states?

Accepted Answer

Corporate conveyance exemption

Answer

Many states offer a corporate conveyance exemption that waives or reduces transfer taxes when a relocation company holds title briefly before reselling to the end buyer.

Question 3

A transferee's capital gain exclusion on the sale of a primary residence under IRC Section 121 requires ownership and use for at least:

Accepted Answer

2 of the last 5 years

Answer

IRC Section 121 allows exclusion of up to $250,000 ($500,000 MFJ) of gain if the taxpayer owned and used the home as a primary residence for 2 of the 5 years before the sale.

Question 4

A reduced exclusion under IRC Section 121 may be available when a taxpayer fails the 2-of-5-year test due to:

Accepted Answer

A change in place of employment, health, or unforeseen circumstances

Answer

IRS regulations allow a partial exclusion when the sale is due to a change of employment location, health reasons, or qualifying unforeseen circumstances.

Question 5

In relocation financial counseling, which document outlines all estimated costs associated with the sale of the employee's current home?

Accepted Answer

Net Equity Analysis (NEA)

Answer

The Net Equity Analysis estimates the employee's proceeds after deducting selling costs, mortgage payoff, and other expenses from the anticipated sales price.

(CRPA) Certified Relocation Professional Appraiser Practice Test

(CRPA) Certified Relocation Professional Appraiser Practice Test

CRPA Tax, Legal, & Financial Considerations 3