Military Base Realignment and Closure Benefit
In the event that a military family is reassigned due to a realignment or base closure, special relocation reimbursement may apply.
Under the Department of Defense’s Homeowners Assistance Program (HAP), benefit payments are made to compensate qualifying uniformed service members and federal employees for the loss in value of a residence at or near a military installation that is partially or totally closed.
These HAP payments are generally excluded from income. The excludable amount is limited to:
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95% of the property’s fair market value, determined by the Secretary of Defense, before public announcement of intent to close all or part of the military facility, minus
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The property’s fair market value at the time of sale.
Any portion of the payment more than the limit is included in income.