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Is a church liable for tax on dividend, interest, annuities, royalties and rents from real property?

April 26, 2017annuities church dividend liable Property rents royalties tax

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Is a church liable for tax on dividend, interest, annuities, royalties and rents from real property?

2 Answers

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Generally, those forms of income are exempted from tax on unrelated business taxable income (IRC Sec 512(b). However, if the rental income is from Debt-Financed Property (not Mortgage-free) and less than 85 percent of the property is used for church’s exempt purpose, then it constitutes unrelated business taxable income.

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Generally, those forms of income are exempted from tax on unrelated business taxable income (IRC Sec 512(b). However, if the rental income is from Debt-Financed Property (not Mortgage-free) and less than 85% of the property is used for churchs exempt purpose, then it constitutes unrelated business taxable income.