NRI-TopBar
March 2010 
Susan Greetings!
 
"It is wiser to find out than suppose."
                                                       - Mark Twain
 
Take two minutes and have a little fun with 10 quick questions on relocation.  There are some tricky ones, but don't worry, no one's keeping score.  You may find some of the answers surprising! 
Got a question for us?    Click here:   Stump NRI 
                                
                                                                                         
                                                                  Sincerely,
                                                                  Susan Bender

Relocation IQ Test



1.
When a home is vacated while it is on the market, what is the average estimated loss in value?
No loss
Three to six percent (3-6%)
One to two percent (1-2%)
Ten percent (10%)


  
2.
In 2010, the final moving expense deduction for mileage is:

55 cents per mile
50 cents per mile
24 cents per mile
16.5 cents per mile


  
3.
What does the German based company, Knauf, have to do with relocation?
They manufactured corrosive drywall in China sent to the USA.
They have designed a new method of testing homes for mold .
They offer worldwide temporary housing accomodations.
They are an international household goods shipper


  
4.
If an employee received a homebuyers tax credit and they are relocated within three years of their purchase,  a prorated amount of the credit is due back to the government.  True or False?
True
False


  
5.
Generally speaking, if a taxable relocation expense of $1000 is reimbursed to an employee in Illinois, approximately how much does it cost a company that plans to make their employee "whole"? 

Which answer is closest?
$1000
$1350
$2000
$1550
6.
Which of these items are taxable relocation expenses?

Select all that apply.
Shipment of household goods
Up to sixty days of storage
Airfare and lodging for final move
Three days of interim living between final move and closing of new home or arrival of household goods
Fifty cents per mile for final move mileage


  
7.
In a recent benchmarking study done by ERC, the two most important drivers for short term international assignments within the respondent's companies are:
Knowledge transfer and training and development
Project based assignments and new business start up
Project based assignments and knowledge transfer


  
8.
Approximately how much is the annual corporate relocation spend in the United States?
$21 Billion
$2 Billion
$500 Million
$50 Billion
$100 Million


  
9.
An assignee in China passes an associate on the street in Shanghai, the associate asks "Have you eaten yet?"  He responds, "No not yet."  The associate walks away embarassed.  What happened?
No response was necessary. In China, this question is as common as "Hi, how are you?" is in the United States.
The assignee should have been more definitive, this was an invitation. "Yes, I would like to join you for dinner", or "No, I have other plans" would have been appropriate responses.


  
10.
This year marks what anniversary for NRI Relocation?
Ten
Fifteen
Twenty
Twenty-five
Thirty


  
Answers:

1.  Three percent is the low end of the expected average loss of a home that is vacated during the marketing period.  This helps explain why homes taken into inventory sell below the appraised value.  A home appraised "as-is" will be different than "as-vacant".

2.  The IRS allows a deduction of 16.5 cents per mile for final move expenses.  

3.  Knauf is the parent company of the Chinese manufacturer of the corrosive drywall that entered the United States as early as 2001. 

4.  False.  The homebuyer tax credit must be paid back in full if a homeowner sells his home within three years of purchasing it. 

5.  $1550 is the closest answer.  There are variables, but using supplemental rates, the gross up for making an employee in Illinois "whole" is approximately 55.4%.  This is calculated by adding the total supplemental tax rates and applying this calculation:   

Total Tax Rates/(1-Total Tax Rates)=Gross-Up Rate

Federal = 25%
IL State = 3%
FICA = 1.45%
OASDI = 6.2%

6.  Non- taxable relocation expenses include:
 
Household goods shipment
Airfare and lodging for final move

Taxable items include:

Storage over 30 days.  

Third day of lodging.  Lodging expenses for one day at the former location after furniture has been moved and one day at arrival in the new location are the only lodging expenses that are allowed (besides lodging during the trip).

The IRS mileage rate is 50 cents but only 16.5 cents is deductible for moving.  Therefore, 33.5 cents per mile is taxable.

7.  Project based assignments and knowledge transfer

8.  $21 Billion

9.  No response was necessary. In China, this question is as common as "Hi, how are you?" is in the United States.

10.  TWENTY FIVE YEARS!!!
 

 
How did you do?  Are you a relocation genius?

Please feel free to contact us to discuss or for explanation.  NRI takes a consultative approach and would be happy to discuss any relocation situation you may be facing.

Contact NRI today:  nri@nrirelocation.com
or (847)215-5000 or visit our website at www.nrirelocation.com