There are specific guidelines for churches when renting out their parking lots. Here are some key points to consider:

Purpose and Use: The rental activity should not interfere with the church’s primary mission and activities. It should be clear that the rental is for a purpose that does not conflict with the church’s exempt status.

Income and UBIT: Rental income from parking lots may be subject to Unrelated Business Income Tax (UBIT) if the activity is not substantially related to the church’s exempt purpose. However, if the parking lot is primarily used for the convenience of the congregation or if the work is performed by volunteers, the income might not be subject to UBIT.

Local Regulations: Churches should comply with local zoning laws and regulations regarding the use of their property for rental purposes.

Insurance and Liability: Renting out the parking lot can expose the church to risks and liabilities. It is important to have appropriate insurance coverage and to consider potential legal exposures..

If you need more specific advice, it might be helpful to contact Pro Advisor Support to answer your questions.

Clergy Financial Resources
Tax I Payroll I Bookkeeping I HR | Consulting
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421.0101

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.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com