26 U.S.C. § 107 — Rental value of parsonages

Page 546 TITLE 26—INTERNAL REVENUE CODE § 107 made by subsection (a) [amending this section] shall apply to distributions on or after the date of the enact- ment of this Act [Dec. 20, 2006].’’ EFFECTIVE DATE OF 2003 AMENDMENT Amendment by Pub. L. 108–173 applicable to taxable years beginning after Dec. 31, 2003, see section 1201(k) of Pub. L. 108–173, set out as a note under section 62 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 301(c)(1) of Pub. L. 104–191 ap- plicable to taxable years beginning after Dec. 31, 1996, see section 301(j) of Pub. L. 104–191, set out as a note under section 62 of this title. Amendment by section 321(c)(2) of Pub. L. 104–191 ap- plicable to contracts issued after Dec. 31, 1996, see sec- tion 321(f) of Pub. L. 104–191, set out as an Effective Date note under section 7702B of this title. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title VII, § 7862(c)(1)(C), Dec. 19, 1989, 103 Stat. 2432, provided that: ‘‘The amendments made by this paragraph [amending this section and section 1161 of Title 29, Labor] shall apply to years beginning after December 31, 1986.’’ Pub. L. 101–239, title VII, § 7863, Dec. 19, 1989, 103 Stat. 2434, provided that: ‘‘Except as otherwise provided in this subpart any amendment made by this subpart [subpart A (§§ 7861–7863) of part V of title VII of Pub. L. 101–239, amending this section and sections 162, 411, 417, and 4980B of this title and sections 1052 to 1055, 1161, 1162, 1167, 1398, and 1461 of Title 29, Labor, enacting pro- visions set out as notes under this section and sections 162, 417, 1167, 4980, and 4980B of this title, and amending provisions set out as notes under sections 401 and 411 of this title and sections 1001 and 1054 of Title 29], shall take effect as if included in the provision of the Reform Act [Pub. L. 99–514] to which such amendment relates.’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1018(t)(7)(A) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under sec- tion 1 of this title. Amendment by section 3011(b)(1) of Pub. L. 100–647 ap- plicable to taxable years beginning after Dec. 31, 1988, but not applicable to any plan for any plan year to which section 162(k) of this title (as in effect on the day before Nov. 10, 1988) did not apply by reason of section 10001(e)(2) of Pub. L. 99–272, see section 3011(d) of Pub. L. 100–647, set out as a note under section 162 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 1114(b)(1) of Pub. L. 99–514 ap- plicable to years beginning after Dec. 31, 1986, see sec- tion 1114(c)(1) of Pub. L. 99–514, set out as a note under section 414 of this title. Amendment by section 1151(j)(2) of Pub. L. 99–514 ap- plicable, with certain qualifications and exceptions, to years beginning after Dec. 31, 1988, see section 1151(k) of Pub. L. 99–514, as amended, set out as a note under sec- tion 79 of this title. Pub. L. 99–272, title X, § 10001(e), Apr. 7, 1986, 100 Stat. 227, provided that: ‘‘(1) GENERAL RULE.—The amendments made by this section [amending this section and section 162 of this title] shall apply to plan years beginning on or after July 1, 1986. ‘‘(2) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREE- MENTS.—In the case of a group health plan maintained pursuant to one or more collective bargaining agree- ments between employee representatives and one or more employers ratified before the date of the enact- ment of this Act [Apr. 7, 1986], the amendments made by this section shall not apply to plan years beginning before the later of— ‘‘(A) the date on which the last of the collective bargaining agreements relating to the plan termi- nates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or ‘‘(B) January 1, 1987. For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement re- lating to the plan which amends the plan solely to con- form to any requirement added by this section shall not be treated as a termination of such collective bar- gaining agreement.’’ REGULATIONS Secretary of the Treasury or his delegate to issue be- fore Feb. 1, 1988, final regulations to carry out amend- ments made by section 1114 of Pub. L. 99–514, see sec- tion 1141 of Pub. L. 99–514, set out as a note under sec- tion 401 of this title. NONENFORCEMENT OF AMENDMENT MADE BY SECTION 1151 OF PUB. L. 99–514 FOR FISCAL YEAR 1990 No monies appropriated by Pub. L. 101–136 to be used to implement or enforce section 1151 of Pub. L. 99–514 or the amendments made by such section, see section 528 of Pub. L. 101–136, set out as a note under section 89 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. § 107. Rental value of parsonages 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 Notes AMENDMENTS 2002—Par. (2). Pub. L. 107–181 inserted ‘‘and to the ex- tent such allowance does not exceed the fair rental value of the home, including furnishings and appur- tenances such as a garage, plus the cost of utilities’’ be- fore period at end. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2002 AMENDMENT Pub. L. 107–181, § 2(b), May 20, 2002, 116 Stat. 583, pro- vided that: ‘‘(1) IN GENERAL.—The amendment made by this sec- tion [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 begin- ning 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 Rev- enue Code of 1986 as provided in such amendment, or Page 547 TITLE 26—INTERNAL REVENUE CODE § 108 ‘‘(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 Inter- nal 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.’’ § 108. Income from discharge of indebtedness (a) Exclusion from gross income (1) In general Gross income does not include any amount which (but for this subsection) would be in- cludible in gross income by reason of the dis- charge (in whole or in part) of indebtedness of the taxpayer if— (A) the discharge occurs in a title 11 case, (B) the discharge occurs when the taxpayer is insolvent, (C) the indebtedness discharged is qualified farm indebtedness, (D) in the case of a taxpayer other than a C corporation, the indebtedness discharged is qualified real property business indebted- ness, or (E) the indebtedness discharged is quali- fied principal residence indebtedness which is discharged— (i) before January 1, 2026, or (ii) subject to an arrangement that is en- tered into and evidenced in writing before January 1, 2026. (2) Coordination of exclusions (A) Title 11 exclusion takes precedence Subparagraphs (B), (C), (D), and (E) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case. (B) Insolvency exclusion takes precedence over qualified farm exclusion and quali- fied real property business exclusion Subparagraphs (C) and (D) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent. (C) Principal residence exclusion takes prec- edence over insolvency exclusion unless elected otherwise Paragraph (1)(B) shall not apply to a dis- charge to which paragraph (1)(E) applies un- less the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E). (3) Insolvency exclusion limited to amount of insolvency In the case of a discharge to which para- graph (1)(B) applies, the amount excluded under paragraph (1)(B) shall not exceed the amount by which the taxpayer is insolvent. (b) Reduction of tax attributes (1) In general The amount excluded from gross income under subparagraph (A), (B), or (C) of sub- section (a)(1) shall be applied to reduce the tax attributes of the taxpayer as provided in para- graph (2). (2) Tax attributes affected; order of reduction Except as provided in paragraph (5), the re- duction referred to in paragraph (1) shall be made in the following tax attributes in the fol- lowing order: (A) NOL Any net operating loss for the taxable year of the discharge, and any net operating loss carryover to such taxable year. (B) General business credit Any carryover to or from the taxable year of a discharge of an amount for purposes for determining the amount allowable as a cred- it under section 38 (relating to general busi- ness credit). (C) Minimum tax credit The amount of the minimum tax credit available under section 53(b) as of the begin- ning of the taxable year immediately fol- lowing the taxable year of the discharge. (D) Capital loss carryovers Any net capital loss for the taxable year of the discharge, and any capital loss carryover to such taxable year under section 1212. (E) Basis reduction (i) In general The basis of the property of the tax- payer. (ii) Cross reference For provisions for making the reduction de- scribed in clause (i), see section 1017. (F) Passive activity loss and credit carryovers Any passive activity loss or credit carry- over of the taxpayer under section 469(b) from the taxable year of the discharge. (G) Foreign tax credit carryovers Any carryover to or from the taxable year of the discharge for purposes of determining the amount of the credit allowable under section 27. (3) Amount of reduction (A) In general Except as provided in subparagraph (B), the reductions described in paragraph (2) shall be one dollar for each dollar excluded by subsection (a). (B) Credit carryover reduction The reductions described in subparagraphs (B), (C), and (G) shall be 331⁄3 cents for each dollar excluded by subsection (a). The reduc- tion described in subparagraph (F) in any passive activity credit carryover shall be 331⁄3 cents for each dollar excluded by sub- section (a). (4) Ordering rules (A) Reductions made after determination of tax for year The reductions described in paragraph (2) shall be made after the determination of the tax imposed by this chapter for the taxable year of the discharge. (B) Reductions under subparagraph (A) or (D) of paragraph (2) The reductions described in subparagraph (A) or (D) of paragraph (2) (as the case may