Matter of: Kathy L. Keszler File: B-253460 Date: October 22, 1993

B-253460: Oct 22, 1993

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CIVILIAN PERSONNEL Relocation Residence transaction expenses Reimbursement Eligibility Property titles At the time she was officially notified of her transfer to a new duty station. Contending that her mother had no financial interest in the residence and that the inclusion of her name on the title was in substitution for a will. Where title to a residence is in the name of an employee and another individual. Reimbursement is limited to 50 percent of the allowable sales expenses. DECISION This decision is in response to a request from the Internal Revenue Service. [1] concerning the entitlement of an employee to be reimbursed 100 percent of allowable real estate expenses when title to the residence was in the names of the employee and a nondependent parent.

Matter of: Kathy L. Keszler File: B-253460 Date: October 22, 1993

CIVILIAN PERSONNEL Relocation Residence transaction expenses Reimbursement Eligibility Property titles At the time she was officially notified of her transfer to a new duty station, employee held title to a residence at her old duty station with her nondependent mother as joint tenants. The employee claims reimbursement for 100 percent of the expenses of selling the residence, contending that her mother had no financial interest in the residence and that the inclusion of her name on the title was in substitution for a will. Where title to a residence is in the name of an employee and another individual, that individual must be a member of the employee's immediate family in order for the employee to be reimbursed 100 percent of the sales expense. Since a nondependent parent does not so qualify, reimbursement is limited to 50 percent of the allowable sales expenses.

DECISION This decision is in response to a request from the Internal Revenue Service, Department of the Treasury,[1] concerning the entitlement of an employee to be reimbursed 100 percent of allowable real estate expenses when title to the residence was in the names of the employee and a nondependent parent. For the following reasons we conclude that reim- bursement is limited to 50 percent of allowable expenses.

Mrs. Kathy L. (Muston) Keszler, an employee of the Internal Revenue Service stationed in Albuquerque, New Mexico, was officially notified on April 11, 1991, that she was to be transferred to Washington, DC, in June 1991. At the time of notification, she owned a residence in which she resided with her husband. However, title to that residence was in her name and her nondependent mother's name. According to Mrs. Keszler, she purchased the residence in 1985 when she was single. Instead of providing for her mother by will, she included her mother's name on the title to the property as joint tenant, with right of survivorship. Her mother's title interest was not removed until May 16, 1991, when a Warranty Deed executed by her mother transferring her interest in the residence to the employee was filed for record in the courthouse of the county of the residence.

Reimbursement for real estate expenses is governed by 5 U.S.C. Sec. 5724a(a)(4) and the Federal Travel Regulation (FTR). Section 302-6.1(c) of the FTR[2] allows an employee full reimbursement for residence sale expenses only if certain specific requirements are met. The first requirement is that title to the residence must be in the employee's name alone, in the joint names of the employee and a member of his/her immediate family, or solely in the name of a member of his/her immediate family. The second requirement in section 302-6.1(c), which qualifies the first, is that the employee's interest in the property must have been acquired prior to the date the employee was first officially notified of the transfer.

We have consistently held that where an employee holds title to a residence with an individual who does not qualify under section 302-1.4(f) of the FTR as a member of his/her immediate family, the employee may be reimbursed only to the extent of his/her interest in that residence.[3] If the family member is a parent or brother or sister they must be dependent on the employee for at least 51 percent of their support.[4] Further, an employee's maximum interest in real estate is fixed on the date the employee is definitely notified of transfer.[5]

As stated above, Mrs. Keszler was notified of her transfer on April 11, 1991. At that time, title to the residence was in her name and the name of her mother, who we understand was not Mrs. Keszler's dependent. Her mother did not transfer her interest in the property to Mrs. Keszler until May 16, 1991. Therefore, since Mrs. Keszler did not have sole title to the residence prior to her notification of transfer, she is only entitled to be reimbursed for 50 percent of the otherwise allowable expenses of selling it.

1. Mr. Clement F. Gross III, Acting Manager, Office of Travel Management and Relocation.

2. 41 C.F.R. Sec. 302-6.1(c) (1992).

3. Gary M. Bria, B-217936, June 24, 1985, and decisions cited.

4. 41 C.F.R. Sec. 302-1.4(f).

5. William J. Fitzgerald, 66 Comp.Gen. 95 (1986) and decisions cited. See also Kathleen Juenger Chandler, B-250378, Aug. 5, 1993.