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Tax Law (Questions About Taxes)/church tax law - 501 C(3)


Our pastor wants the church to purchase a home for $375,000 with the church's equity and then the church will lease to own the property back to the Pastor.  It is my understanding that since the church is purchasing, the 20% downpayment will not be required and possibly thaere will be no property taxes.  Is this legal, especially since we are a 501 3(C) organization?

church may purchase land. no problem there.
church may rent house to pastor. no problem there.

if church rent at below fmv, then pastor has income, but he might be able to avoid recognition of income for the imputed gain by using parsonage exemption.  depending upon facts, should be no problem.

if parsonage, most locations allow for property tax exemption (as is the case where i am from - ct, but it is a town by town decision - not state level.  state provides for town to adopt, but it must take action)

good luck  

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


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