Is the cost of replacing a driveway eligible for the housing allowance?

Is the cost of replacing the driveway eligible for the housing allowance, or is it considered a capital improvement and therefore not eligible?

I am replacing a damaged driveway, and my tax preparer told me that the cost is not eligible because it is considered a capital improvement. Is this correct?

Comments for Is the cost of replacing a driveway eligible for the housing allowance?

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Nov 01, 2016
Driveway is eligible, but...
by: Bill OConnell - Wisdom Over Wealth

Capital improvements are allowed in calculating what the church declares as a pastor's housing allowance. But it is likely a moot point.

The Housing Allowance exclusion on the clergyman's form 1040 is limited to the lesser of three things:
1. What was actually spent.
2. What the church declared.
3. The fair rental value of the home.

It is unlikely that replacing the driveway will have influenced #3 very much. So, check with a real estate expert in your area and run the numbers to determine where you will end up.

Nov 02, 2016
housing allowance adjustment
by: Lewis in NC

I agree with Bill O'Connell, but to include the expense of a driveway would necessitate an adjustment to increase the church's approved housing allowance if this new expense puts the minister's housing expenses over the previously approved amount for this year. The church council can increase the amount of the housing allowance by the projected cost of the driveway within the clergy's salary now and it can be used by December 31st if the driveway can be built and paid for before the 31st.

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