Concordia pension - housing allowance

[Bob Hoffman]

In the past a retired minister client of mine received a pension from Concordia that included a provision for housing (up to 100% of allowable housing) He has passed away. I'm just wondering whether the allowance is still available only for his widow? I will be investigating further; just wondered whether anyone had any experience in this matter.

Thanks in advance!

[JohnH]

Unfortunately the exclusion for the H&U allowance for a retired minister does not extend to the widow. I wish it did, as I prepare returns for several widows of retired ministers and when the husband died they effectively saw a decrease in income and an increase in tax liability simultaneously. If you or anyone else should turn up anything to the contrary, I'd be grateful to learn about it.

[Bob Hoffman]

Unfortunately the exclusion for the H&U allowance for a retired minister does not extend to the widow. I wish it did, as I prepare returns for several widows of retired ministers and when the husband died they effectively saw a decrease in income and an increase in tax liability simultaneously. If you or anyone else should turn up anything to the contrary, I'd be grateful to learn about it.

John-

Is this a federal reg or just common sense in your mind. I'm having a hard time finding any sites that speak to the issue of housing allowances for widows of ministers.

[Margaret CPA in OH]

I checked my Church and Clergy Tax Guide 2007 by Richard Hammar. It states that retired ministers are elegible for this if certain conditions are met. "However, the surviving spouse of a deceased minister is not eligible for the exclusion unless he or she also is a minister who otherwise qualifies. IRS Publication 517 states: "If you are a retired minister, you exclude from your gross income....However, a minister's surviving spouse cannot exclude the rental value unless the rental value is for ministerial services he or she performs or performed." So maybe check the Pub. 517.

[Bob Hoffman]

I checked my Church and Clergy Tax Guide 2007 by Richard Hammar. It states that retired ministers are elegible for this if certain conditions are met. "However, the surviving spouse of a deceased minister is not eligible for the exclusion unless he or she also is a minister who otherwise qualifies. IRS Publication 517 states: "If you are a retired minister, you exclude from your gross income....However, a minister's surviving spouse cannot exclude the rental value unless the rental value is for ministerial services he or she performs or performed." So maybe check the Pub. 517.

Thank you, Margaret.

[BulldogTom]

I am just throwing this out because I am interested, not because it applies to anything (or maybe it does).

We know that in the year a spouse dies, survivor can still file MFJ. Can the non-minister survivor in the year of death take the same tax treatment for housing in the year of death?

Here is a more specific what if - H&W filing joint for 20 years. H is minister and excluding 10K per year Housing. H dies in Jan. after recieving housing allowance for the entire year. Can W file MFJ and claim housing exclusion of 10K.

I know, who has time at this time of year to think about made up crap like this? Sorry if it is stupid.

Tom

Lodi, CA

[Bob Hoffman]

I am just throwing this out because I am interested, not because it applies to anything (or maybe it does).

We know that in the year a spouse dies, survivor can still file MFJ. Can the non-minister survivor in the year of death take the same tax treatment for housing in the year of death?

Here is a more specific what if - H&W filing joint for 20 years. H is minister and excluding 10K per year Housing. H dies in Jan. after recieving housing allowance for the entire year. Can W file MFJ and claim housing exclusion of 10K.

I know, who has time at this time of year to think about made up crap like this? Sorry if it is stupid.

Tom

Lodi, CA

It's not stupid; that is exactly what I did in 2006, the year he died. 2007 she is filing single. Thanks for your input.

[MAMalody]

It's not stupid; that is exactly what I did in 2006, the year he died. 2007 she is filing single. Thanks for your input.

As I have read it, the housing allowance ceases at the death of the pastor, therefore, in the example stated (he died in January) there would only be a partial year housing allowance. The designation is not relevant at that point. There has been no guidance that I have seen that indicates an annual consideration but whether the designated recipient is alive.

[Margaret CPA in OH]

Mike, the two pastor clients I have retired in 2007. They have sent me a form from the Board of Pensions that declares, per IRS allowance, that their pension is deemed housing allowance and not subject to income tax (per usual standards, frv, etc.). It doesn't, however, address the SECA issue. Nor does my Church and Clergy Tax Guide. I plan to call BofP but what do you think? The denomination is Methodist. Thanks!

[MAMalody]

Mike, the two pastor clients I have retired in 2007. They have sent me a form from the Board of Pensions that declares, per IRS allowance, that their pension is deemed housing allowance and not subject to income tax (per usual standards, frv, etc.). It doesn't, however, address the SECA issue. Nor does my Church and Clergy Tax Guide. I plan to call BofP but what do you think? The denomination is Methodist. Thanks!

Per 1402(a)(8) it is not subject to SE tax.

[Margaret CPA in OH]

Perfect! I was working on a projection for estimated payments and that DOES make a difference. Thanks so much.