U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter B— Computation of Taxable Income › Part PART III— ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME

26 U.S.C. § 107

Rental value of parsonages

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In the case of a minister of the gospel, gross income does not include—(1) the rental value of a home furnished to him as part of his compensation; or(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.(Aug. 16, 1954, ch. 736, 68A Stat. 32; Pub. L. 107–181, § 2(a), May 20, 2002, 116 Stat. 583.)Editorial NotesAmendments

2002—Par. (2). Pub. L. 107–181 inserted “and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities” before period at end.

Statutory Notes and Related SubsidiariesEffective Date of 2002 Amendment

Pub. L. 107–181, § 2(b), May 20, 2002, 116 Stat. 583, provided that:“(1)In general.—The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2001.“(2)Returns positions.—The amendment made by this section also shall apply to any taxable year beginning before January 1, 2002, for which the taxpayer—“(A) on a return filed before April 17, 2002, limited the exclusion under section 107 of the Internal Revenue Code of 1986 as provided in such amendment, or“(B) filed a return after April 16, 2002.“(3)Other years before 2002.—Except as provided in paragraph (2), notwithstanding any prior regulation, revenue ruling, or other guidance issued by the Internal Revenue Service, no person shall be subject to the limitations added to section 107 of such Code by this Act for any taxable year beginning before January 1, 2002.”

Notes of Decisions
Cited in 74 cases (1 in the last 5 years), 1930–2024 · leading case: Freedom From Religion Found., Inc. v. Geithner, 644 F.3d 836 (9th Cir. 2011).
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Freedom From Religion Found., Inc. v. Geithner, 644 F.3d 836 (9th Cir. 2011). · cites it 2× “26 U.S.C. § 107 . FFRF seeks a declaration that the challenged statutes are unconstitutional and an injunction forbidding the defendants from “continuing to grant or allow tax benefits under sections 107 and 265(a)(6) of the Internal Revenue Code and the corresponding sections…”
Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989). · cites it 2× “26 U. S. C. § 107 ; see also § 213(b)(11) of the Revenue Act of 1921, ch.”
Freedom From Religion Found., Inc. v. Lew, 773 F.3d 815 (7th Cir. 2014). · cites it 3× “” 26 U.S.C. § 107 . The plaintiffs conceded in the district court that they did not have standing to challenge § 107(1), which applies to in-kind housing provided to a minister, but argued that they did have standing to challenge § 107(2), which applies to rental allowanees paid…”
Annie Gaylor v. Steven Mnuchin, 919 F.3d 420 (7th Cir. 2019). · cites it 3× “We must decide whether excluding housing allowances from ministers' taxable income is a law "respecting an establishment of religion" in violation of the First Amendment.”
Gaylor v. Mnuchin, 278 F. Supp. 3d 1081 (W.D. Wis. 2017). · cites it 3× “At issue is the constitutionality of 26 U.S.C. § 107 (2), which excludes from the gross incomp of a “minister of the gospel” a “rental allowance paid to him as part of his compensation.”
Freedom from Religion Found., Inc. v. Lew, 983 F. Supp. 2d 1051 (W.D. Wis. 2013). · cites it 4× “§ 702 , contending that certain federal income tax exemptions received by “ministers of the gospel” under 26 U.S.C. § 107 violate the establishment clause of the First Amendment and the equal protection component of the Fifth Amendment.”
Hofferbert v. Marshall Et Ux, 200 F.2d 648 (4th Cir. 1952). · cites it 4× “§§ 51 (b) and 12(d) and computed the tax in accordance with the formula of 26 U.S.C. § 107 (a). The examining officer of the Bureau of Interna] Revenue disallowed the return in so far as it accounted for one-half of this item as income of the wife and held that the entire item…”
Libhart v. Copeland, 949 S.W.2d 783 (Tex. App. 1997). “26 U.S.C.A. § 107 (West 1988). Appellees elicited other testimony from Libhart about the parsonage without objection.”
Dickman v. Sch. Dist. No. 62c, 366 P.2d 533 (Or. 1961). · cites it 2× “[16] 26 USC § 501 (c)(2), (3), 501(d) (1958) (exemption from income tax of religious organizations and corporations); 26 USC § 107 (1958) (exclusion from gross income of a rental allowance or home given a minister); 26 USC § 170 (1958) (individual taxpayer's deduction for…”
Sloane v. Comm'r of Internal Revenue, 188 F.2d 254 (6th Cir. 1951). · cites it 2× “hat even if the amount should be considered ordinary income as compensation for services, the services extended over a period in excess of sixty months and more than seventy-five percent of the total compensation was received in one year, in consequence of which petitioner…”
Jay Carter Joan H. Carter v. United States, 973 F.2d 1479 (9th Cir. 1992). “See 26 U.S.C. § 107 . Joan Carter, who is employed, donates to the PPULC fifty percent of her income, the maximum deductible contribution to a qualifying religious organization.”
Douglas Page v. Comm'r of Internal Revenue, 58 F.3d 1342 (8th Cir. 1995). “The tax court did not err in disallowing Page a parsonage allowance under 26 U.S.C. § 107 for the rental value of the Valley View property.”
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26 U.S.C. § 107(a): 2 cases
Curtis B. Dall v. Comm'r of Internal Revenue, 228 F.2d 526 (2d Cir. 1955).
Cont'l Illinois Nat'l Bank & Trust Co. v. United States, 137 F. Supp. 821 (N.D. Ill. 1955).
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