Property Tax Exemption

We want to rent out the church parsonage. What tax issues do we need to be aware of?

Property Tax
You must put the property back on the property tax roll. This can be accomplished by visiting the office of your county tax appraiser.

Income Tax
In regard to a tax-exempt organization under Internal Revenue Code 501, IRC Section 512(b) exempts from tax the unrelated business income derived from rent of real property, unless the property is not owned debt-free. If there is a mortgage on the parsonage, any rental income is subject to the Unrelated Business Income Tax (UBIT). To read more about UBIT, click here.

The Great Plains Conference is not engaged in rendering tax, legal or other professional services. The services of a competent professional person should be sought for legal advice, tax advice or other expert services.