302-3.421—What are the income tax consequences when my agency pays for property management services?

When your agency pays for property management services:

(a) You will be taxed on the amount of property management expenses your agency pays, whether it reimburses you directly for your expenses or pays a relocation services company to manage your residence; and

(b) Your agency will pay you a relocation income tax allowance under part 302-17 of this chapter for substantially all of the additional Federal, State and local income taxes you incur on the expenses your agency pays.

Code of Federal Regulations

Note to § 302-3.421 : You may wish to consult with a tax advisor to determine whether you will incur any additional tax liability, unrelated to your agency's payment of your property management expenses, as a result of maintaining your residence as a rental property.

CFR

302-3.421—What are the income tax consequences when my agency pays for property management services?

Code of Federal Regulations