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An employee of the Internal Revenue Service claimed reimbursement for real estate expenses which he incurred in acquiring a residence at his new duty station. The claimant's housing and financing were obtained by stock purchase in a cooperative which owned and operated the apartment building in which his new residence was located. Previously, GAO had analyzed an employee's entitlement to expenses incurred in the sale of a cooperatively owned apartment incident to an official transfer. In this case, the analysis is extended to those expenses which are reimbursable in connection with the purchase of a cooperatively owned apartment at an employee's new official duty station. GAO held that: (1) in the absence of evidence clearly establishing a different arrangement, an interest in a cooperatively owned apartment building will be considered a form of ownership in a residence for which real estate expenses may be reimbursed; (2) the lottery fee may be distinguishable as an incidental charge made for required services in connection with the purchase of a cooperative for which reimbursement may be further considered, but the amount claimed as an application fee must be further explained to adequately differentiate it from a membership fee; (3) claims for expenses for mortgage service, insurance, and legal services in connection with the employee's purchase of a cooperative apartment at the new offical station must be further explained and itemized to enable the agency to ascertain qualifying mortgage expenses, insurance entitlements, and legal expenses; (4) expenses for marketing and advertising extend only to the sale of a residence at the old duty station and may not be reimbursed in connection with the purchase of a residence at the new duty station; (5) expenses for real estate tax and operating reserves are specifically precluded from reimbursement; and (6) the downpayment and security deposit are part of the purchase price and not a part of the cost or expenses of purchasing and are not reimbursable as relocation expenses. Accordingly, the claim was reimbursable per instructions.


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