If the clergy person is a permanent resident of the nursing home, the housing allowance applies to the nursing home because the nursing home is the minister’s primary residence. Charges for food and medical care are not considered housing expenses. Ask the administrator of the residence to provide the portion of their monthly payments that represents housing costs (rental, utilities, etc.).
When the clergy housing allowance is applied against nursing home costs, it cannot also apply for the home where the spouse resides.
Clergy temporarily in a nursing home would continue to use their primary home for the housing allowance. In this case, the nursing home expenses could not be used toward the housing allowance.
The IRS has ruled that a lump-sum entrance fee paid by a retired minister to gain admission to a retirement community can only be treated as a housing expense in the year it was actually paid. It cannot be prorated over several years and claimed as a housing expense in those years.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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