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Tax Law (Questions About Taxes)/Tax Question on Church Purchasing a Car for the Pastor

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Question
Our church purchased a New car for our Pastor and his wife in 2013.  There is some confusion on how to properly address the cost and how to report the car to the IRS.  The car cost just short of $25000.00, and was paid for out of the church general fund.  Two church members wanted to contribute towards the purchase of the car, so after the car was purchased the two members each paid for 1/4 of the car which was deposited back into the church general fund account.  We are not sure how to report this on the pastors W-2 for the year.  Does the total amount of the car have to be reported on the pastors w-2 or because it was a gift to the pastors wife as well, do we report 1/2 of the cost of the car on his w-2.  The car is in the pastors name, not his wife, or the church's name.  Please let me know the proper reporting procedure, and where on his W-2 we would report the amount.  Thank you

Answer
Tammy,

Thanks for your question.

The car is considered compensation to the pastor, even if it is a gift to both he and his wife.  She received it because of the position held by her husband.  The cost of the car is reported in box 1 of the W-2, along with his regular salary.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

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 www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

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.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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