Certified Relocation Professional (CRP) Practice Exam

Which policy assists the transferee with tax liability regarding home sale payments?

1. Cover the employees' tax liability on loss on sale payment

2. Use a depreciation factor when determining the transferee's value in the home

3. Cover 100% of the loss with no payment limits

4. Require the transferee to use the amended value option

The correct answer is: Cover the employees' tax liability on loss on sale payment

The option that assists the transferee with tax liability regarding home sale payments is to cover the employees' tax liability on loss on sale payment. This approach directly addresses the financial implications that can arise due to the sale of a home, specifically when a transferee experiences a loss. When a transferee sells a home at a loss, they may be subject to having to pay taxes on that loss if the company does not provide support for it. By covering the employees' tax liability related to that loss, the organization ensures that the employee is not financially burdened due to the relocation process. This can significantly ease the stress of selling a home and allows the transferee to transition more smoothly to a new location. The other options may involve different methods of handling home sale payments, but they do not directly assist with the transferee's tax liability in the same way. For example, using a depreciation factor would involve calculating the home's value differently, which does not provide direct financial relief regarding tax impacts. Covering 100% of the loss without limits could lead to different implications regarding tax treatment, while requiring the transferee to use an amended value option might not adequately assist them with their tax liability either. The primary goal here is to ensure that any financial repercussions