Our church's CPA says that because a Holy Land trip will serve in the continuing education of our pastor, it would be a tax-deductible expense. Is this correct?
The answer is no. Many churches present their minister with an all-expense paid trip to the Holy Land. This benefit constitutes taxable income if either or both of the following statements are true:
- The trip is provided to honor the minister for his or her faithful services on behalf of the church.
- The trip is provided to enhance or enrich the minister's ministry. While a trip to the Holy Land can benefit one's ministry, such a trip is not a business expense under current law. The tax code provides that "no deduction shall be allowed … for expenses for travel as a form of education" IRC 274(m)(2).
The church's payment of the cost of such a trip is treated as the payment of personal vacation expenses, ...