Signature Relocation Emphasizes Buyer Value Option (BVO) Home Sale Programs Add up to Significant Cost Savings!
At Signature Relocation, we are passionately committed to the relentless pursuit of global service excellence, particularly when it comes to buying or selling your home. Today we can reference IRS Revenue Ruling 2005-74, this ruling addresses the income tax treatment of costs an employer incurs in connection with the different home purchase programs the employer may offer to relocating employees.
The most common type of tax-protected home sale program is the Buyer Value Option or BVO. BVO is a process in which an employer can pay for a transferring employee’s home selling costs and avoid the income tax implications to the employee and to the company. The home sale program creates two separate sale transactions: one where the transferring employee sells their home to a relocation management company (RMC), such as Signature Relocation, and the other where the RMC sells the home to the outside buyer.
How Does it Work?
- Step One – The transferring employee, with assistance from Signature Relocation, markets their home for sale.
- Step Two – When an outside buyer comes along and makes an offer, Signature Relocation steps in and buys the home from the transferring employee.
- Step Three – Signature Relocation then turns around and sells the home to the buyer, and pays the realtor commissions and closing costs. These costs can then be treated as business expenses by the company.
- Step Four – Signature Relocation bills the employer for the realtor commissions and closing costs that Signature Relocation paid as the seller. Since the transferring employee never paid any real estate commissions or closing costs, the transferring employee incurs no income tax burden.
It is important to note that there must be two separate transactions. If the deal were to fall through after the relocation company buys the house from the transferring employee, there are no do overs; when structured properly, the BVO sale process can be a win-win for all.
For more information about how much you can save with Buyer Value Option (BVO) or other relocation needs, please visit our website at www.signaturerelo.com or call us at (877-373-0691) ) or email (email@example.com) for more information.