A minister’s housing (or parsonage) allowance under IRC 107 is excludable from gross income only to the extent it is used to rent or otherwise provide a bona fide “home”—that is, a dwelling place complete with the usual amenities (such as furnishings and, for example, a garage) as indicated in the statute and regulations (IRC 107; § 107, Source ID: [/26/statute/107]).

In the context of an RV, the IRS does not provide a specific ruling addressing “RV homes.” Instead, the same general principles apply. Under IRC 107 and the accompanying Income Tax Regulations (for example, section 1.107-1(b)), a “home” is defined functionally as a dwelling place, regardless of whether it is a traditional house or another type of structure. Therefore, if a minister owns an RV and uses it as his principal residence—and if the RV has the necessary attributes of a dwelling (for example, adequate sleeping, cooking, and sanitary facilities) such that its fair rental value can reasonably be established—then the housing expenses incurred (including maintenance, utilities, and similar outlays) may be treated as expenses for providing a home. That means any rental or housing allowance received by the minister that is used to cover those expenses up to the RV’s fair rental value (including its furnishings and appurtenances) can be excluded from gross income under IRC 107.

On the other hand, if the RV is used only temporarily or does not possess the features of a traditional dwelling, it may not qualify as a “home” under these provisions. In that event, expenses related to the RV would not support the parsonage allowance exclusion and any amounts received in excess of the expenses actually incurred for a qualifying home would need to be included in the minister’s gross income.

In summary, the general rule is that only those housing expenses used “to rent or provide a home” qualify for the exclusion under IRC 107. If the minister’s RV meets the criteria of a bona fide dwelling, its fair rental value (plus applicable costs such as utilities) may be used to measure the excludable housing allowance. Otherwise, the expenses would not qualify, and amounts not used for a bona fide home must be included in gross income.

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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.

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