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Church and Rental

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    Church and Rental

    I have a small country church. They have a parsonage house. The current clergy has his own house and wishes to stay there. The church in order to pay the clergy and maintain church expenses wish to rent the house to a third party. Question is, does this income create a tax problem for the church? I was informed that They have never filed any kind of return in the past. Just didn't know what this rental may do to them. My original thought was that since they are using the funds to pay church related expenses and not in the business of renting it would not create a problem. Your thoughts please.

    Here's a link to one opinion.
    Not sure if it's the final word, but he provides some cites.

    I do like his recommendation regarding the property tax component of the issue. This is a judgment call and not all local property tax assessors will react in the same manner. It's probably best to disclose the situation to them and then abide by whatever decision they render.
    Last edited by JohnH; 11-09-2017, 09:44 AM.
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