As we begin 2013, it?s a good time to take a look back at the tax and legal landscape as it relates to relocation in 2012, and how relocation programs may be impacted moving into 2013. Cartus? latest issue of Mobility Insights?2012 Tax & Legal Update reviews issues that have been discussed before, new issues that are cropping up, and what we see around the corner.
Old issues that still bear attention include:
? Short sales, which don?t appear to be going away any time soon
? The potential continued impact of the Homebuyer?s Tax Credit
? A refresher on the meaning of the One-Year Rule
? The fact that IRS audits continue and the need for employers to ensure that their home sale programs comply with Tax Ruling 2005-74
We also touch on a new Medicare tax that has frequently been mislabeled as a national sales tax on real estate: what it is, who it impacts, and some resources for understanding this new tax. Many of the current difficulties that a borrower faces when getting a mortgage are legal in nature. Even if you haven?t had a short sale or foreclosure, credit requirements are much tighter than before the mortgage meltdown, and some houses that were financeable in the past might not be now. This is having an impact on relocating employees on both the departure and destination sides.
As far as what we see coming around the corner, we appear to be going ?back to the future? in the real estate market and are seeing bidding wars by buyers who are competing ?for the same home. For some, this is a surprising trend. In one sense, bidding wars are a good sign of a strengthening real estate market. But there can also be challenges on the departure transaction when a house attracts the attention of two competing buyers. Often, the interests of employees (who understandably want the highest price for their home) and the employer and Cartus (who want to make sure they get the best offer that will actually close) may diverge. Also worth keeping an eye on are the issues of emails as binding agreements and the use of digital signatures.
We?ve received questions about how the ?fiscal cliff? might impact relocation. Worldwide ERC??s Tax Counsel Pete Scott wrote a blog post on the recent legislation, Fiscal Cliff Deal Includes Relief Important to Mobility, that sheds some light on this issue.
Take a look at our latest issue of Mobility Insights?2012 Tax & Legal Update or listen to Cartus? free eLearning webinar 2012 Tax and Legal Update.
If you have any questions, we?d love to hear from you; just email me at bruce.perlman@cartus.com.
Source: http://www.cartusblog.com/customer-serviceqa/2012-tax-legal-update-for-relocation-cartus-insights/
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