Worldwide ERC Coalition Alert

Worldwide ERC® Coalition Breaking News: IRS Issues Favorable Ruling on Home Purchase Programs 


Late on November 30, 2005, the Internal Revenue Service released the ruling long sought by the relocation industry on the tax treatment of relocation home purchase programs. Worldwide ERC® Coalition tax counsel Peter K. Scott noted that "Revenue Ruling 2005-74 provides an unqualified endorsement of Appraised Value transactions, and of Amended Value transactions that conform to the 11 key elements crafted by ERC in 1985. In addition, the ruling holds that use of a blank deed is appropriate in such transactions, and the IRS will not seek to apply the Amdahl case to them."

Scott noted that the ruling also includes an unfavorable fact scenario under which two sales will not be deemed to have occurred, and Amdahl will apply. That scenario will require further analysis, and may suggest that changes in some current practices would be beneficial.

The complete IRS ruling is available.

For in-depth Coalition description and analysis, refer to the our newest research tool, the Tax & Legal MasterSource (search on Rev. Rul. 2005-74). For background information on this subject, search on "Amdahl" in the MasterSource.