Clergy Housing Allowance?

[Chief]

Clergy in huge political block

Don't under estimate the power of this block in our country. A minister can retire and the housing allowance is not only exempt from federal income tax but is exempt from self employment tax. See publication 17.

[GIMoe]

Housing allowance

My client resides in a house owned by the church. I don't believe my client pays rent to the church but even if my client did, I am going assume that it is no different then any other taxpayer paying rent on their personal residence meaning its non-deductible.

Your thoughts?

Actually, Clergy/Ministers are in a unique position. They are in fact allowed to exclude from their income the rent or 'fair rental value' of their parsonage, including utilities, as long as it is not more than the reasonable pay for their services. They can exclude this for incmoe taxes but must pay SE tax on that amount.

We haven't even talked about housing allowance yet.

For more info see Pub 517.

http://www.irs.gov/publications/p517/index.html

http://www.irs.gov/taxtopics/tc417.html

[AZ-Tax]

My client resides in a house owned by the church. I don't believe my client pays rent to the church but even if my client did, I am going assume that it is no different then any other taxpayer paying rent on their personal residence meaning its non-deductible.

Your thoughts?