Relocation programs are commonly structured to take full advantage of tax laws affecting the purchase and sale of employee homes. At the Federal level, in Revenue Ruling 2005-74, the IRS validated tax protection for an amended value program using a deed-in-blank. As welcome as this ruling was, it suddenly brought state tax issues to the forefront because, regardless of any federal tax rulings permitting use of a single deed, some states require two deeds.
Based on new information provided by Worldwide ERC®, changes have recently been made to the two-deed process. Four states and the District of Columbia have been added to the list of two-deed states, bringing the total to 13*: Delaware, Hawaii, Illinois, Indiana, Kentucky, Nevada, New Hampshire, New York, Oklahoma, Pennsylvania, Rhode Island, Texas, and Washington.
* Plus the District of Columbia, Virgin Islands, and Puerto Rico
Our latest Cartus Mobility Insights, Two Deed or Not Two Deed, outlines the key issues that may arise when real estate practices vary widely from state to state. It also presents the Cartus “Blended Option,” which allows clients to capture available cost savings by using a single deed in certain states, while still taking prudent steps to manage legal and tax risk by using two deeds in others.
For more details on the two-deed process and Cartus’ “Blended Option,” download our Mobility Insights: Two Deed or Not Two Deed.