The housing allowance is one of the most valuable tax benefits available to ministers. Yet, many ministers either fail to claim it or do not claim enough. In some cases, this results from tax advisors who are unfamiliar with ministers' taxes. In this article, I will summarize the requirements for obtaining the full benefit available to ministers who live in a church-owned parsonage. In the next issue, I will discuss the rules that apply to ministers who rent or own their homes. Section 107 of the Internal Revenue Code says simply that "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, to the extent used by him to rent or provide a home." There are four important considerations to note in this section, First, the housing allowance is available only to a minister of the gospel. The income tax regulations (drafted by the Treasury Department and interpreting the Code) define a minister of the gospel to include any minister who has been ordained, commissioned, or licensed by a church or church organization that qualifies as a tax-exempt religious organization. Ministers who have been licensed by a religious organization that both licenses and ordains clergy must perform substantially all the religious functions of an ordained minister in order to qualify for the exemption.