"Stuart A. Bronstein" <spamtrap[at]lexregia.com> writes:
- quote -

[snip]

- quote -

For what it's worth, there is no mortgage (or any
other debts) on this property.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:

- quote -

I had a similar question come up recently with a client
that is a religious organization.

Calculating ubti with respect to rental of real estate
is actually quite complex. First you have to know if
there's a mortgage on the property. And if so, was the
loan taken out to purchase the property, or to fix up
the property contemplated at the time of the purchase?

Then you need to read sections 511 through 514 very
carefully to see if you can figure it all out.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Our parish (Episcopal) is between rectors and our interim
rector has his own home, which means our rectory is vacant.
The diocese has given us permission to rent out the rectory
in 2006 and it looks like that's going to happen.

The 2006 gross rent will be about $21,000 (out of total
parish gross income of about $140,000). The tenants will
be responsible for utilities. It is a standard residential
real estate lease (tenant pays fixed monthly rent).

My questions are:
(a) Is this rent UBTI? I've read over Pub 598 and
it's not clear to me. For example, page 9 says
"Rents of real property, including elevators and
escalators, are excluded in computing UBTI."
I'll admit that does seem very clear, but renting
a rectory to a member of the general public doesn't
seem particularly related to exempt operations of
a church, either.
(b) If it is UBTI, how can I estimate a decent ballpark
figure of what the tax liability will be? While
actually filing the return will be my successor's
job (my term as treasurer expires in a couple
of months), I have to put together the proposed
2006 budget and want to have some idea of what to
budget for taxes on this rent.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >