B-171493, FEB 2, 1971

B-171493: Feb 2, 1971

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A-56 STATES THAT "THE EMPLOYEE WILL ALSO BE LIMITED TO PRO RATA REIMBURSEMENT WHEN HE SELLS OR PURCHASES LAND IN EXCESS OF THAT WHICH REASONABLY RELATES TO THE RESIDENCE SITE.". SINCE CLAIMANT'S RESIDENCE OCCUPIES LOTS 16 AND 17 - HE IS ENTITLED TO REIMBURSEMENT FOR EXPENSES INCURRED IN THE SALE OF THIS PARCEL ONLY AND BECAUSE THE RECEIPTS FURNISHED SHOW THAT THE REMAINING REIMBURSABLE EXPENSES WERE BASED ON THE SALE OF ALL THREE PARCELS AND CANNOT BE SEPARATED CLAIMANT IS ENTITLED TO 72.27 PERCENT OF OTHERWISE REIMBURSABLE EXPENSES INCIDENT TO THE SALE OF HIS THREE PARCELS OF LAND. THE PRINCIPAL RESIDENCE AND A GARAGE APARTMENT WERE LOCATED ON THE TWO INNER LOTS NOS. 16 AND 17 WHICH SOLD AS ONE PARCEL FOR $41.

B-171493, FEB 2, 1971

SALE OF RESIDENCE - LAND RELATED TO "RESIDENCE SITE" DECISION CONCERNING PROPRIETY OF VOUCHERS SUBMITTED BY HALLECK A. BUTTS FOR REIMBURSEMENT OF COSTS INCIDENT TO THE SALE OF HIS RESIDENCE CONSISTING OF THREE PARCELS OF LAND AT HIS OLD DUTY STATION. SECTION 4.1(F) BOB CIR. NO. A-56 STATES THAT "THE EMPLOYEE WILL ALSO BE LIMITED TO PRO RATA REIMBURSEMENT WHEN HE SELLS OR PURCHASES LAND IN EXCESS OF THAT WHICH REASONABLY RELATES TO THE RESIDENCE SITE." SINCE CLAIMANT'S RESIDENCE OCCUPIES LOTS 16 AND 17 - HE IS ENTITLED TO REIMBURSEMENT FOR EXPENSES INCURRED IN THE SALE OF THIS PARCEL ONLY AND BECAUSE THE RECEIPTS FURNISHED SHOW THAT THE REMAINING REIMBURSABLE EXPENSES WERE BASED ON THE SALE OF ALL THREE PARCELS AND CANNOT BE SEPARATED CLAIMANT IS ENTITLED TO 72.27 PERCENT OF OTHERWISE REIMBURSABLE EXPENSES INCIDENT TO THE SALE OF HIS THREE PARCELS OF LAND.

TO MR. JOHN C. MACKALL:

THIS REFERS TO YOUR LETTER OF DECEMBER 8, 1970, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION WHETHER YOU MAY PROPERLY CERTIFY FOR PAYMENT THE ENCLOSED VOUCHER OF MR. HALLECK A. BUTTS, DATED OCTOBER 12, 1970, TO REIMBURSE HIM PER DIEM AND TRANSPORTATION EXPENSES AS WELL AS THE COSTS HE INCURRED IN THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION IN CONNECTION WITH HIS TRANSFER FROM MIAMI, FLORIDA, TO CHARLOTTEE, NORTH CAROLINA, AS AN EMPLOYEE OF THE SMALL BUSINESS ADMINISTRATION. MR. BUTTS, BY LETTER DATED DECEMBER 22, 1970, SUBMITTED ADDITIONAL INFORMATION IN SUPPORT OF HIS VOUCHER.

YOU SAY YOU DO NOT QUESTION THE PER DIEM AND TRANSPORTATION EXPENSES BUT YOU DO QUESTION THE PRORATION OF COSTS INVOLVED IN THE SALE OF THE RESIDENCE. THE REAL PROPERTY SOLD CONSISTED OF FOUR LOTS NOS. 15, 16, 17 AND 18. THE PRINCIPAL RESIDENCE AND A GARAGE APARTMENT WERE LOCATED ON THE TWO INNER LOTS NOS. 16 AND 17 WHICH SOLD AS ONE PARCEL FOR $41,700. THE OUTER LOTS, NOS. 15 AND 18, WERE SOLD SEPARATELY FOR $8,000 EACH. GARAGE WITH APARTMENT ABOVE WAS LOCATED ON LOT NO. 18. ALTHOUGH SEPARATE TRANSACTIONS WITH THREE DIFFERENT COUPLES WERE INVOLVED, MR. BUTTS IS OF THE OPINION THAT THIS IS IMMATERIAL AND THAT HE IS ENTITLED TO REIMBURSEMENT FOR 91.52 PERCENT OF THE TOTAL COSTS INCURRED INCIDENT TO THE SALE OF THE PROPERTY. HE CONTENDS THAT HIS RESIDENCE CONSISTED OF HIS HOUSE AND FOUR LOTS, ALL OF WHICH ARE WITHIN A HEDGE BOUNDARY, THAT THIS CONSTITUTED ONE COMMON LAWN, AND WAS USED AS SUCH BY HIS FAMILY. STATES "BY ANALOGY, IF AN EMPLOYEE HAPPENED TO LIVE ON TWENTY ACRES NOT SUBDIVIDED AND NOT USED FOR COMMERCIAL PURPOSES WOULD NOT THE WHOLE AREA BE CONSIDERED HIS RESIDENCE IF HE TREATED AND USED IT AS HIS HOME?" ACCORDINGLY, HE BASES HIS CLAIM ON 91.52 PERCENT OF THE TOTAL COSTS. THIS IS REACHED BY ATTRIBUTING $52,806.72 TO THE SALE OF THE RESIDENCE AND LOTS AND $4,893.28 TO THE SALE OF THE TWO GARAGE APARTMENTS.

SECTION 4.1 OF THE BUREAU OF THE BUDGET CIRCULAR NO. A-56, AS REVISED JUNE 26, 1969, PROVIDES IN PERTINENT PART:

"4.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE PAYABLE. THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT WILL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS OLD OFFICIAL STATION; PURCHASE (INCLUDING CONSTRUCTION) OF ONE DWELLING AT HIS NEW OFFICIAL STATION; OR THE SETTLEMENT OF AN UNEXPIRED LEASE INVOLVING HIS RESIDENCE OR A LOT ON WHICH A HOUSE TRAILER USED AS HIS RESIDENCE WAS LOCATED AT THE OLD OFFICIAL STATION; PROVIDED THAT:

"F. THE EXPENSES FOR WHICH REIMBURSEMENT IS CLAIMED WERE PAID BY THE EMPLOYEE. IF ANY EXPENSES WERE SHARED BY PERSONS OTHER THAN THE EMPLOYEE, REIMBURSEMENT IS LIMITED TO THE PORTION ACTUALLY PAID BY THE EMPLOYEE. THE RESIDENCE IS A DUPLEX OR ANOTHER TYPE OF MULTIPLE OCCUPANCY DWELLING WHICH IS OCCUPIED ONLY PARTIALLY BY THE EMPLOYEE, OR WHENEVER THE EMPLOYEE SHARES RESPONSIBILITY FOR A LEASED PROPERTY (SUCH AS A SHARED APARTMENT ARRANGEMENT), EXPENSES WILL BE REIMBURSED ON A PRO RATA BASIS. THE EMPLOYEE WILL ALSO BE LIMITED TO PRO RATA REIMBURSEMENT WHEN HE SELLS OR PURCHASES LAND IN EXCESS OF THAT WHICH REASONABLY RELATES TO THE RESIDENCE SITE."

THE UNDERLINED PART OF THE QUOTED REGULATIONS LIMITS REIMBURSEMENT TO COSTS OF SALE OF LAND WHICH REASONABLY RELATES TO THE RESIDENCE SITE. WHERE, IN CIRCUMSTANCES SUCH AS HERE INVOLVED, THE EMPLOYEE HAS DIVIDED HIS PROPERTY INTO SEPARATE PARCELS FOR SALE PURPOSES, IT MUST BE CONCLUDED THAT PARCELS OTHER THAN THAT UPON WHICH THE HOUSE IS LOCATED DO NOT RELATE TO THE "RESIDENCE SITE" WITHIN THE GOVERNING REGULATIONS.

IN THIS CASE MR. BUTTS PAID $3,127.50 COMMISSION ON THE SALE OF HIS RESIDENCE WHICH OCCUPIED LOTS 16 AND 17 FOR WHICH HE IS ENTITLED TO REIMBURSEMENT. HOWEVER, HE WOULD NOT BE ENTITLED TO REIMBURSEMENT OF ANY OF THE COMMISSION PAID FOR THE SALE OF LOTS 15 AND 18 SOLD IN SEPARATE TRANSACTIONS. THE RECEIPTS FURNISHED SHOW THAT THE REMAINING REIMBURSABLE EXPENSES WERE BASED ON THE SALE OF ALL THREE PARCELS OF LAND AND CANNOT BE SEPARATED.

THEREFORE, MR. BUTTS WOULD BE ENTITLED TO 72.27 PERCENT (41,700/57,700) OF OTHERWISE REIMBURSABLE EXPENSES INCIDENT TO THE SALE OF HIS THREE PARCELS OF LAND.

THE VOUCHER IS RETURNED HEREWITH FOR HANDLING IN ACCORDANCE WITH THE ABOVE.