Case:
Client is Pastor Jimmy Jones, is an ordained minister in the Blessings Church in Dallas. In the current year, Client received payments from the church for his services of $150,000. Of this amount, the church designated $60,000 for compensation and $90,000 as a housing allowance. Client and his wife own a home and have actual expenditures during the year for the home of $72,000. The house is located in a well-established rental market, and the fair rental value of the home for the current year is $55,000.Client wants to know how he and his wife should report the amounts for the current year's tax return.
Write a Tax client file memo, include facts, issues, and conclusions, and analysis. Give recommendations and conclusion in the file memo.