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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1304
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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We are a church and we have a 1500 dollor mortgage fee. there

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We are a church and we have a 1500 dollor mortgage fee. there are 4 rental properties on the land also .... Can we have lease agreements without having to file papers with the government and reporting the amounts of the rentals
Submitted: 7 years ago.
Category: Tax
Expert:  Mark D replied 7 years ago.

Churches can still be subject to Unrelated Business Taxable Income (UBTI) and required to file Form 990-T on the net income of property that is rented and debt-financed from acquisition or improvement indebtedness. If the property was not debt-financed, there would be no filing requirements. Even if the property is debt-financed, there are still some exceptions that would exempt this income from taxation. One, if the debt-financed property has more than an 85% use that is devoted to the church's exempt purpose. Another exemption would be if the lessor was a related organization that also had an exempt-purpose use. These are just a couple of the most common exceptions. Please let me know if you have further questions.


Mark D
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Customer: replied 7 years ago.
can i get back to you after doing more reseaerch or will there be additinal cost?