Pastor

Continuing education for ministry leaders
Pastor
Weekly Lessons, created and written by Richard R. Hammar, J.D., LL.M., CPA, give you a basic legal overview of essential topics based on staff or volunteer positions within a church.

Previous Lessons

Week of August 25

Special Occasion Gifts

Week of September 1

Love Offerings

This Week's LessonWeek of August 18

Retirement Gifts

Introduction

Our lesson this week examines the topic of Retirement Gifts. The Executive Summary provides a concise review of the key points. Before we get started, test your knowledge by completing the following quiz.

Many churches have provided a retiring pastor with a retirement gift. The gift may be a car or other item of property. Or, it may be cash. Sometimes, these gifts are very generous. Should the church report such a gift as taxable compensation and include it on the pastor's W-2 or 1099? Or, can the church and pastor treat the transaction as a nontaxable gift?

Weekly Quiz

Instructions Click on the correct answer for each of the following questions.

Executive Summary

It is common for pastors to receive gifts from their congregation on special days. Ordinarily, these gifts are funded through offerings collected from the congregation. Because the offerings are collected in recognition of some special occasion (such as Christmas, a birthday, or anniversary) many pastors and church treasurers assume that these offerings represent nontaxable "gifts." This assumption often is incorrect, since in most cases these offerings must be reported as taxable income. This lesson will help you to evaluate whether special occasion gifts you receive should be reported as taxable compensation, or as a nontaxable gift.

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