Rental Donation - tax Deductable?

by Jeff
(Colorado)

If someone offers the pastor a housing rental at a discounted rate is there a way to offer a tax deduction for the balance?


In other words, the church cannot afford a parsonage. We would like to offer an incentive to the landlord for offering reduced rent.

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Oct 13, 2013
Rental Donation-tax deductible?
by: Anonymous in NC

Let's say your church pays your pastor $40,000. Let's say the person who is donating this rental house for the pastor's use usually gets (in its rental market)$850/month to rent it. The church board could include this ($850 X 12) $10,200 and the cost of utilities, renters insurance, furnishings, and any other household expenses of the pastor (let's pretend that comes to $4500) within the pastor's government approved housing allowance IRS 107. The total of $14,700 would have to be approved as the housing allowance for the pastor and recorded in the minutes of the church (has to be done the year prior to effectiveness). The church can acknowledge with a letter to the landlord that he/she has donated a rental house in lieu of parsonage in the amount of $10,200.

When the pastor's W-2 form is filled out at the end of the year, instead of $40,000 of gross income listed, it would be $40,000-$14,700= $25,300 in box 1. You could list in box 14 (housing allowance $14,700 to remind the pastor he has to use that sum in addition to the $25,300 in calculating his self-employment tax. But he only pays income tax on $25,300. Hope this helps

Oct 13, 2013
No Charitable Contribution for Discounts
by: Vickey

If it is actually donated property, you can give them the appropriate receipt, but not for a discount.

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