Tax Law (Questions About Taxes)/Property tax exempt


Our church going to rent the pastoralo house to the members of the church for $500.00 and the property have a mortgage payment of 2,100.00 monthly. We can loose the tax exempt? where I founded that information?


Rev. Centeno


You won't lose your tax exemption, but you might have to pay tax on the income.  There is an exception in Code Sec 514 that allows allows you to avoid paying tax on debt financed income.  Basically, you must have a definite plan to use to property for exempt purposes within 15 years and inform the IRS of your plan within 90 days before the end of the fifth year.

Of course, the other point is that you are probably not making any money on the rental, so there would be no income to report.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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