Can dissolving church sell real estate to pastor?

[Pgoree]

Can a dissolving church sell real estate to the pastor that originally deeded the property to church several years ago? My initial research says no. My research says the recipient of the property must be: 1. Another exempt organization. 2. Federal, state or local government for public purpose or 3. A court appointed organization functioning in a similar capacity as the dissolved church. Are there any exceptions where a tax exempt church can sell assets to a “individual” “human”? Thanks for any clarity on this.

[Anarchrist]

Selling isn't distributing. The charity will then need to distribute the cash it receives on the sale.

[Uncle Sam]

I strongly suggest you read the Church's Articles of Incorporation and/or by-laws with respect to disposition of Church property upon dissolution.
Usually from what I've seen and read about regarding exempt organizations, remaining property must be distributed to an exempt organization.
It is not gifted to a private individual - that violates the basic premise of an exempt organization's existence - the inurement of benefit to a private party.
See TTB page 25-4 for Exempt Organization reference sources.

[Lion]

I don't have any churches as clients, but could there be related-party or employee buying at less than FMV or other issues due to the relationship between the church and it's employee/pastor? Does the church have any requirements from its regional or national church body that governs how property is held and disposed of? Bylaws? Canons? State law?

[Pgoree]

Thank you all so much. I kept digging also and it appears the dissolving church can “sell“ the assets to the pastor as long as it’s sold at FMV. The assets can be “sold” just not distributed/transferred/given to the pastor because he’s not an exempt entity. Selling to pastor at less that FMV could be viewed as “gifting” the assets violates federal tax laws. But I’ll also advise the pastor to review the language in its bylaws concerning dissolution procedures and provide me with a copy.

[Uncle Sam]

The church can sell the building to the pastor at FMV to dispose of the building as a church asset - but what will the church do with the cash afterwards to dissolve the church?

[TAXNJ]

....Selling to pastor at less that FMV could be viewed as “gifting” the assets violates federal tax laws. But I’ll also advise the pastor to review the language in its bylaws concerning dissolution procedures and provide me with a copy.

If the pastor reviews “the language in its bylaws concerning dissolution procedures and provide me with a copy”, what does that mean? What are you going to do with a “copy”?

Review and guidance on the IRS code is one area but providing “legal” advice is another.

In most states providing “legal” advice is allowed only by a state licensed attorney and not a tax preparer who is not a state licensed attorney.

Think it is important to know the difference when reply posters (who would not be responsible) suggest giving legal advice other than review and guidance on the IRS code as it applies to the scenario.

This scenario may require the advice of a licensed attorney (preferably a Tax Attorney) for any legal issues that may be involved.

[MDEA]

This is why I have always not done any tax returns of any clergy it is a world of its own. I would make them get legal advice.