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Staff Lodging as Taxable Income

The value of free lodging for employees may be constitute taxable income.

Key point: The value of lodging provided to faculty and staff by a private school may constitute taxable income.

• Is the value of free lodging provided to faculty and staff at a private school taxable? That was the question addressed by the IRS in a private letter ruling. A private school provides rent-free lodging to five categories of employees: (1) administrative staff; (2) faculty and instructional support staff ("teaching staff"); (3) resident dormitory staff ("dorm parents"); (4) infirmary staff; and (5) maintenance staff. The lodging provided to employees includes utilities (heat, electricity, water, and sewers) and maintenance. The fair rental value of the lodging was not included on the employees' W-2 forms for the years at issue. Students at the school reside in a dormitory setting consisting of cottages. Each cottage is supervised by a dorm parent who lives in the ...

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Posted:
  • July 1, 1994

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