Corporate Mobility Solutions

Sibcy Cline Corporate Mobility

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25 RELOCATION GLOSSARY Acquisition Appraised value transaction Assigned sale transaction Amended Value transaction (A-V) Process of purchasing the employee's home ("buy-out") during the relocation process; taking it into inventory. Situation in which the corporation/third-party purchases the employee's home for a price established through appraisals. The corporation/third-party, the corporation/third-party then markets the home for re-sale and incurs carrying costs in the meantime. Similar to an amended-value transaction, except that the employee signs the outside buyer's offer and then "assigns" the sale to the third-party company for closing. If the outside sale falls through, the transaction reverts to an appraised-value transaction at the price offered by the third-party company. The amended-value transaction is more common and is preferred over the assigned sale from a tax liability standpoint. Situation in which an outside buyer is obtained during the offer period prior to acquisition of the employee's home by the third-party company, with the third-party amending its offer price to that of the outside buyer on an unconditional basis. In effect, the employee sells his home to the third-party for the outside buyer price, and the third-party in turn closes the transaction to that buyer. There are two separate transactions, and because no commission is paid to the employee to reimburse him for the sale, the tax consequences are more favorable under this type of transaction. If the sale to the outside buyer falls through, the third-party still pays the employee the full price rather than the appraised value price, and the third-party then has the responsibility for reselling the home as with any inventory property. The employee has no further responsibility. In an amended value transaction, the employee does not sign the offer from the outside buyer. The AV transaction is most common with pre-marketing assignments in which a buyer is secured under the program before the employee accepts the company's/third-party's offer to buy his home.

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