Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 56-85

1956-1 C.B. 433

Sec. 107

Sec. 1402

IRS Headnote

A duly ordained minister of a church, who elects under section 1402(e), as added to the Internal Revenue Code of 1954, to have the insurance system established by Title II of the Social Security Act extended to services which he performs in the exercise of his ministry, should exclude from the net earnings from self-employment for a taxable year ending after 1954 the value of a home furnished to him as a part of his compensation or the rental allowance paid to him as a part of his compensation to the extent used by him to rent or provide a home.

Full Text

Rev. Rul. 56-85

Advice has been requested as to the amount to be included in net earnings from self-employment by a duly ordained minister of a church who has elected social security coverage and who, in 1955, in addition to cash salary will receive either (a) free occupancy of a house, or (b) a cash rental allowance in lieu of a house.

Section 1402(e), as added to the Internal Revenue Code of 1954 by Public Law 761, 83d Cong., 68 Stat. 1087, 26 U.S.C. 1402, 1952 Edition, Supplement II, C.B. 1954-2, 603, provides, among other things, that a duly ordained, commissioned, or licensed minister of a church may, under the circumstances stated therein, certify that he elects to have the insurance system established by Title II of the Social Security Act extended to services performed in the exercise of his ministry.

Section 107 of the Code provides that gross income does not include the rental value of a home furnished to a minister of the gospel as part of his compensation, or the rental alowance paid to him as part of his compensation, to the extent used by him to rent or provide a home.

Accordingly, it is held that a duly ordained minister of a church, who elects under section 1402(e) of the Code to have the insurance system established by Title II of the Social Security Act extended to services which he performs in the exercise of his ministry, should exclude from the net earnings from self-employment the value of a home furnished to him as a part of his compensation as a minister, or the rental allowance paid to him as a part of such compensation to the extent used by him to rent or provide a home.