Pastors

[veritas]

from pub 517

(I don't see this in the TTB? Did I miss something?)

Excess rental allowance. You must include in gross income the amount of any rental allowance that is more than the smallest of:
Your reasonable pay,

The fair rental value of the home plus utilities, or

The amount actually used to provide a home.


Include the excess rental allowance on Form 1040, line 7.

Retired pastors

According to TTB whatever part of a pension that is designated as housing allowance is non taxable. But do the same rules apply from above?

[thomtax]

I'm at home right now and don't have the course in front of me, but if I remember correctly the following apply:
1. The entire housing allowance is to have SE tax paid upon it.
2. The unused housing allowance goes on line 21 and is shown as Unused Housing Allowance.
3. Retired minister is handled same as active minister with respect to the income tax portion.

LT

[GIMoe]

Pub 517

1. The entire housing allowance is to have SE tax paid upon it.

Pub 517 shows an example return and also has worksheets to use for this. Housing allowance gets added in with all pastoral income, then the unreimbursed employee business expenses and undeductible bus (sch c) expenses are subtracted out. The resultant figure goes to Schedule SE.

from pub 517

(I don't see this in the TTB? Did I miss something?)

Excess rental allowance. You must include in gross income the amount of any rental allowance that is more than the smallest of:
Your reasonable pay,

The fair rental value of the home plus utilities, or

The amount actually used to provide a home.


Include the excess rental allowance on Form 1040, line 7.

Retired pastors

According to TTB whatever part of a pension that is designated as housing allowance is non taxable. But do the same rules apply from above?

As to whether these rules apply to retired ministers, I can see why there would be confusion, it wasn't very clear to that specific topic of retired ministers. I think I would treat it the same as an active minister in that respect.

[Black Bart]

Excess housing allowance

2. The unused housing allowance goes on line 21 and is shown as Unused Housing Allowance.

That's where I've been putting it (and describing it as), too. I was unaware that IRS wanted it added back in with wages on line seven (although the money's the same either way). I got the "line 21" thing out of some ministers' guide several years ago. But I like ours better (less confusing), so I'm gonna keep doin' it that way.

[Grumpy]

Rev Rul 63-156 states that the rental allowance paid to a retired minister is excludable to the extent directly used to provide a home.


Rev. Rul. 63-156

1963-2 C.B. 79

Sec. 107

Full Text

Rev. Rul. 63-156

A retired minister of the gospel is furnished rent-free use of a home pursuant to official action taken by the employing qualified organization in recognition of his past services which were the duties of a minister of the gospel in churches of his denomination. In addition, he is paid a rental allowance, within the meaning of section 107(2) of the Internal Revenue Code of 1954, for utilities, maintenance, repairs and other similar expenses directly related to providing a home.

Held , that the rental value of the home furnished to the retired minister as part of his compensation for past services is excludable from his gross income under section 107(1) of the Code. Also, the rental allowance paid to him as part of his compensation for past services is excludable under section 107(2) of the Code, to the extent used by him for expenses directly related to providing a home.

[veritas]

Thanks to All

I do think the authors of The Tax Book could enhance the section dealing with clergy.