Another limit on the exclusion for the housing allowance is the sum of the fair rental value
of the home, furniture, and appurtenances such as a garage, plus the cost of utilities.
Barrow, in return, requested half of the fair rental value
during the time that her former husband occupied the home.
Concerning the housing allowance, a minister may exclude the least of the following (IRS Publication 517): 1) the amount actually used to provide a home (see items in Exhibit 2); 2) the amount designated as a housing allowance; or 3) the annual fair rental value
of the furnished home.
A difference between the rental specified in the lease and the fair rental value
plus the renewal right could arise either because the lease rentals were set initially at less than fair rental value
, or because during the term of the lease the value of the land, and consequently its fair rental value
If the minister resides in the church's parsonage, then the fair rental value
of the parsonage may be excluded.
Certain conditions, such as the fact that all rights, interest, and title transfer to P; that it is unreasonable to assume that P intends to go into the business of leasing the equipment; and the total rental payments' exceeding the equipment's fair rental value
lead to a conclusion that a sale has occurred as opposed to the creation of a true lease.
077 uses the words "credits" and "setoffs," but it cannot be relied upon as authority to set off 50 percent of the fair rental value
for a period of exclusive possession as against 50 percent of a cotenant's payment of reimbursable household expenses of the marital home during the primary residential parent's exclusive occupancy with the minor children.
gross income does not include the rental allowance paid to him as part of compensation to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value
of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.
Example: Brenda, age 55, owns her own home free and clear, with an adjusted basis of $75,000, a fair market value of $200,000 and with a fair rental value
or $1,000 a month.
If fair rental value
means a rent that is most fair to both sides, regardless of the market level, should it make a difference to the arbitrator that one side can't elicit any more rent from an apartment building, because of rent control or rent-stabilized rentals, to pay more than a certain level of underlying lease rent, even though that rent level is less than what may be deemed a market rental?
Now that reporting the number of days each rental property is rented at fair rental value
and the number days the property is used for personal purposes is required on Form 8825, practitioners must decipher Sec.
Later, after Congress amended IRC section 107 to limit the allowance to the fair rental value
of the parsonage, the Warrens and the IRS agreed to dismiss the case.