Parsonage Allowance

[L.S.]

Treadmill purchase allowed? According to Worth's Guide for Ministers it is not on the "yes" list and not on the "no" list.

[JohnH]

I'd say yes.

No different than a toaster, blender, or coffee pot.

And better for your health than a TV or VCR.

(All of which are allowable).

[jainen]

>>No different than a toaster<<

That is correct, no different. And a toaster is not separately allowable, because Section 107 says [emphasis added], "the fair rental value of the home, INCLUDING FURNISHINGS and appurtenances such as a garage, plus the cost of utilities."

You don't get to count EVERY thing just because it takes place in the house, and in any case the actual cost is irrelevant. A treadmill is not going to change the fair rental value of the home, so it will have no effect on what can be excluded as housing allowance.

[JohnH]

I disagree. It most definitely is not irrelevant. If the actual allowance is equal to or less than the FRV of the house and if the actual expenditures are less that the amount of the H&U allowance, then it will cetainly make a difference. I have several ministers who routinely spend less than the amount of the H&U allowance and thus they have to pull some of the H&U allowance back into taxable income. Whether or not the toaster or treadmill can be counted would be an important issue for any of them.

Back to the original question, I'm still sticking with the treadmill being included as a part of the H&U allowance for the reasons stated above. A treadmill is a furnishing (in my house it's a great place to hang coats, jackets, and store shoes on the belt). Whether a particular furnishing actually adds to the FRV is also irrelevant - it just has to be a furnishing in order to fall into the acceptable category of expenditure.

Maybe Mike Malody will see this and clear it up for us. That's the main reason I'm bumping it.

[jainen]

>>clear it up for us<<

No need--I am convinced by your reasoning that as long as the total housing expenditures don't exceed the fair rental value, it does not matter which costs come up. In my opinion, it could be mortgage, capital improvements, furnishings or whatever, and they can be excluded if otherwise qualifying.

But now let me ask you: Would you still say a toaster is no different, that is, a great place to hang coats, jackets, and store shoes?

[JohnH]

Let me get back to you on that.

Tonight I'l try hanging the coats & jackets on the toaster & see how it works out.

However, I won't move the shoes off the belt because then my wife will start nagging me to actually USE the treadmill now that it's been cleaned off.

[L.S.]

Thank you for your responses - yes, in this particular instance it does make a difference for this pastor. In fact, this pastor is my son.

[jainen]

>>my wife will start nagging me to actually USE the treadmill <<

Just tell her that you are using the toaster instead, and people on your tax forum say that's no different. Even the pastor agrees.