CRPA Tax, Legal, & Financial Considerations 5

Question 1

When an employer offers a lump-sum relocation payment instead of direct reimbursements, the tax treatment is:

Accepted Answer

Fully taxable as wages in the year received

Answer

Lump-sum relocation payments are included in the employee's W-2 wages and are fully subject to income and FICA taxes under post-TCJA rules.

Question 2

In a corporate homesale program, the 'marketing period' refers to:

Accepted Answer

The period the home is listed and available for outside buyers to make offers

Answer

The marketing period is when the home is actively listed on the market, giving outside buyers the opportunity to purchase before the employer exercises its buyout option.

Question 3

Which financial metric do relocation appraisers use to help forecast how quickly a property is likely to sell at or near the anticipated sales price?

Accepted Answer

Absorption rate

Answer

The absorption rate measures how quickly available homes in a market are selling, helping appraisers estimate a realistic marketing period.

Question 4

A relocating employee who rents out their former home rather than selling it would generally be ineligible for:

Accepted Answer

The corporate homesale assistance program benefits

Answer

Corporate homesale programs are designed for employees who sell their primary residence; converting the home to a rental typically disqualifies the property from program benefits.

Question 5

Under ERC guidelines, what is the minimum number of independent appraisals typically required before a guaranteed buyout offer is issued to an employee?

Accepted Answer

Two appraisals from unrelated appraisers

Answer

ERC guidelines recommend two independent appraisals to establish an offer price, with a third ordered if the first two diverge significantly.

(CRPA) Certified Relocation Professional Appraiser Practice Test

(CRPA) Certified Relocation Professional Appraiser Practice Test

CRPA Tax, Legal, & Financial Considerations 5