Where the tax rules on employee business expenditures are concerned, a church is generally treated like any other employer. Which is to say, the rules will be different depending on the sort of plan the expenses will be paid through: an accountable reimbursement plan or a non-accountable reimbursement plan. The difference between these two types of plans will determine whether the expenditures are considered employer costs of business (and, as the church is tax-exempt, then so will be the expenses) or whether the expenses will be considered the employee’s income (and, therefore, taxable).
When a buyer and seller of a home come together over a purchase agreement, they may at times find that contingencies need to be made. In this context, contingencies are certain conditions that have to be met before a buyer will be able to close on the home. Should these conditions fail to be met, the contract can be canceled without causing penalty—either to the buyer or seller of the property—other than lost time and the potential of missing other offers that might have been made if the home had not gone under the purchase agreement. And while contingencies come in many different forms, there are some contingencies we tend to see more often than others.
Churches provide tremendous value to their surrounding communities, and beyond, in the outreach activities they undertake. It’s a truism that human beings derive benefit both materially and spiritually from charitable exchange—both in the giving and in the receiving. In its outreach, it is imperative that a church create guidelines to direct the sort of charitable giving that may occur. This will be based mainly on who may receive the benefits of such outreach.
A real estate lawyer performs numerous functions within the rubric of real estate law. In fact, though we at Provident Law provide a full slate of real estate law services, there are many in this area of law who sub-specialize. And it’s important to get a real estate lawyer involved in a transaction well before it occurs—because the concept of land ownership is defined almost entirely by specific terms of art with which a layperson may be unfamiliar.
Every election season, churches find themselves caught in the midst of questions about what is permissible when it comes to political candidates. The current tax law limits what a church may do if it wants to maintain its tax-exempt status. In short, churches must not endorse or oppose candidates for public office if they wish to avoid endangering their tax-exempt status.
It may seem obvious to most what real estate law is, or what it should be, but when people stop to think about it often they realize that they don’t know the whole story. First things first: “real estate,” or “real property,” refers to land and buildings (or edifices) that sit on it. Real estate law, therefore, is the set of laws and customs governing who may live on, work on, use, or pass across a particular plot of land or building, and, further, who may sell or buy it, and under what conditions.
As nonprofit organizations, churches are not in it for the money—though of course, they must bring in funds in order to perform their operations, to secure places of worship, to pay their employees, and so forth. Still, they don’t have “shareholders” in the sense that standard corporations do. And therefore the standard of care and the duties those running the church (the elder board, deacon board, or other governing body—also called “directors” of the corporation) must adhere to are different in kind. For their part, church directors have a fiduciary duty to the church itself, which means that a church director must act in the best interest of the church, taking care to stick to its mission—and this means, in turn, that they cannot act in their own self-interest to the church’s detriment.
In today’s litigious culture, you would think it’s enough for property owners to worry just about risks arising from their own conduct – for example, slip and fall cases, environmental hazards, trespass issues, etc. Do owners really need to worry also about lawsuits because of their tenant’s conduct? Recent trends in case law suggest the answer is yes.
The tax-exempt status granted to churches by law is fundamentally designed such that its benefits are essentially funneled to the churches themselves. If an individual receives too much benefit from a transaction with the church—in the form of payment by the church for products, property, or services that goes well beyond market value—particularly if that person is somehow linked to the church in one of a number of key ways—then the IRS may choose to impose sometimes severe penalties on the church. That is to say, the only parties that may benefit when a church enters transactions with third parties are the church itself and the third party—and that third party must not be someone who is defined as a “disqualified person.” Any transaction that violates this principle is called an “excess benefit transaction.”
When Realtor.com released its report last spring on the burgeoning state of the “under $200,000” market, one thing was clear: anyone looking to find a starter home in the current market may have to settle for (or revel in—depending on one’s perspective) a home that can be purchased for well short of what a home in good condition would cost: a fixer-upper.
Today, the United States Supreme Court granted review of two cases involving the ministerial exception doctrine. The two cases are the first time the high Court will consider the ministerial exception since it unanimously upheld the doctrine in 2012.
The Tax Cuts and Jobs Act of 2017 was experienced by many investors in the real estate industry as a confounding law whose rules and incentives had an uncertain effect on the taxes they would be required to pay. Things got so confusing that the IRS saw need to clarify how, in particular, the 20 percent pass-through deduction would affect such investors.
The automatic exemption of churches from taxation is a fundamental right under our national constitution. And while most other forms of charities are required to file IRS form 990 or 990-EZ, churches are exempted even from this requirement. The First Amendment’s granting of freedom of religion has led both the courts and the Internal Revenue Service to have accordingly adopted a “hands off” approach to church taxation.
I joined the United States Army out of stubbornness and to prove a point. (Kids, do not follow my example on this.)
One of my favorite cousins had previously joined the Army. I overheard my mother and aunt laughing at the idea of “Miss Ann” joining the force. Until that point I had never had any desire to join the military. But I tell you—that laughter struck a chord, and I became determined to have the last laugh.
A major piece of news in the housing sector of late has been a plan proposed by President Trump to privatize the major government-sponsored entities (GSEs) in the marketplace—Fannie Mae and Freddie Mac. These entities, which were brought under government conservatorship in 2008 with a $191.5 billion bailout as a response to the housing crisis, have gone from being sources of concern in the market a decade ago to being quite profitable. But what might the effect on privatization be on the major modern form of home financing in the American landscape: the 30-year mortgage?
One common aspect of church life is the creation of new works. Ministers write sermons to deliver at worship services. Choral and worship directors and employees compose musical pieces and arrangements for performance at services. Sunday school plans and lessons are composed. Audio-visual projects are created. Art is crafted. Books are written. These things are usually considered intellectual property by the law.
The question becomes: who owns all of this output?
Between September 2018 and February 2019 we saw a moderate gain in home inventory prior to home shopping season, following a solid 44 months of consecutive inventory decreases. Some speculated that this perhaps meant that the number of people choosing to list their homes had at last begun to rise.
Unfortunately, this was not apparently a result of new listings going on the market—which would have indicated new sellers. Rather, the key metric at that time was that buyer demand had begun to fall off a bit due to a sustained period of rapid price growth, which resulted in a mild case of “buyer burnout” leaving housing listings on the market longer. An effect of this was a slight softening in the rise of housing prices.
The First Amendment to the US Constitution guarantees religious freedom to churches. From colonial times and since the creation of the very first tax code, churches have always been exempt from federal income taxes. This is part of the guarantee of religious freedom. After all, what the government can tax, it can control and even ultimately destroy. That’s why the federal Tax Code contains an automatic exemption for churches as public charities. Churches also enjoy numerous other favorable benefits such as special rules in place to limit audits, and even state and local tax exemptions.
The amount of mortgage debt in the United States is surprisingly low. Though the raw number of outstanding mortgages increased during the second quarter of 2019 to reach beyond the level met at the peak prior to the so-called Great Recession, according to the Federal Reserve of New York the number of outstanding mortgages relative to home values (not including home equity lines of credit) was a lower percentage of the whole than in 2009, when it reached a high of 54.7 percent. Indeed, in the first quarter of 2019 this number hovered at just around 35.4 percent. Why should this be the case, particularly when one considers the rather recent ramping-up of real estate values throughout the nation (including in the area surrounding Phoenix)?
When a church receives a financial benefit in the form of business income, a number of perhaps unexpected challenges can crop up—particularly with regard to taxes. According to the IRS, income that issues from a source that is not considered to match the purpose of a church is classified differently than exempt income pulled in by church-purpose activities. Such Unrelated Business Income—which may come from coffeehouse proceeds, from the renting of church property, or from other such forms of activity—can be taxed despite an organization’s tax-exempt status, particularly when it exceeds $1000. In this case, the organization is required to file a Form 990-T, and must also pay estimated tax when the tax amount for the year is expected to break the $500 limit.