Buyer Value Option (BVO)

🏠 Buyer Value Option (BVO)

Do you know the difference between a Buyer Value Option (BVO), an Amended Value (AV), and a Direct Reimbursement program? Relocation home sale programs can involve unfamiliar terms and complex tax rules—but understanding the differences can mean dramatic savings for both transferees and corporations.

📘 What Is a Buyer Value Option?

After the 2018 Tax Reform Bill, most relocation-related deductions were eliminated—making virtually all moving expenses taxable. But one key exception remains: the Buyer Value Option (BVO), also known as an “Amended Sale.”

✅ The BVO program covers home sale costs—the #1 reported relocation expense—and provides critical tax protection.

💡 By implementing a BVO program, companies can eliminate the need for gross-up, saving an average of $15,000 or more per home sale, depending on the sale price.

👍 Pros of the BVO Program

✅ Removes financial burden from employees

🚫 Eliminates front-end and back-end tax costs

🔄 Streamlines the home sale process

💰 Saves both company and employee money

⚠️ Cons of the BVO Program

🏚️ Risk of sale falling through may require company to take the home into inventory

💸 Inventory homes can increase corporate costs

🔧 How Does a BVO Program Work?

🏡 Employee markets the property and receives a valid offer

📝 Offer determines the home’s value

🏢 Relocation company purchases the home from the employee

🤝 Relocation company resells it to the buyer

💼 Realtor fees and closing costs are paid by the company as tax-deductible business expenses

Example:

Pam lists her home for $250,000 and receives an offer

The relocation company purchases it from Pam

They handle the sale to the buyer, cover costs, and eliminate Pam’s tax liability

Her employer avoids gross-up expenses

📊 Buyer Value Option vs. Direct Reimbursement

🔁 Direct Reimbursement Example

Description

Amount

Home Sale Price

$500,000

Real Estate Commission

$30,000

Closing Costs

$10,000

Total Selling Costs

$40,000

Employee Tax (No Gross-Up)

-$12,000

Net to Employee

$28,000

Total Company Cost to Net $40K

$60,000

✅ BVO Example

Description

Amount

Home Sale Price

$500,000

Real Estate Commission

$30,000

Closing Costs

$10,000

Total Company Cost

$40,000

IRS Tax Withholding

$0

Gross-Up Cost

$0

Company Savings

$20,000

Employee Savings

$12,000

💡 Key Benefits of a BVO Program

✅ Eliminates tax liability for home sale reimbursements
✅ Removes need for gross-up
✅ Reduces employee stress and increases relocation acceptance
✅ Saves up to $15,000+ per sale
✅ Ensures two arm’s-length transactions
✅ Complies with IRS Revenue Ruling 2005-7

🧾 Additional Considerations

While BVOs are powerful tools, some risks include:

❌ Failed sales may require corporate purchase

📉 Overpriced homes can delay sales or lead to price drops

💵 Additional fees may apply:

Recording fees

Transfer taxes

Title and escrow costs

Inspections and repairs

🏢 About CARS

Corporate America Relocation Services (CARS) is a leading provider of BVO programs and home sale solutions. We offer:

✔️ Full compliance with IRS and ERC regulations
✔️ GSA Schedule 653-5 approval for U.S. Government relocation services
✔️ Proven satisfaction, backed by top rankings in the 2019 HRO Baker’s Dozen and consistent 5-star transferee reviews on Facebook

🔎 For more information, refer to the official IRS Revenue Ruling 2005-7 on Amended Sales.

📩 Ready to Simplify Your Home Sale Process?

[Contact Us Now] to speak with a Certified CARS Relocation Counselor and explore how a BVO program can benefit your next employee relocation.