United States

Housing benefits and taxation – A misunderstood area

Housing benefits for independent schools


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Educational organizations often offer free or subsidized on- or off-campus housing to faculty, staff and support persons. Internal Revenue Code section 119 provides for the potential exclusion from the taxable income of the employee the value of the free use of that housing.

If there was ever an Internal Revenue Code section that is misunderstood and ultimately misapplied, it is section 119, and the Internal Revenue Service (IRS) has made this known, through its approach to the statute’s application. In addition, it appears the IRS may have been lobbying Congress to change section 119, because of the perceived and real marketplace misunderstanding of its “actual” application.

In Housing benefits and taxation – A misunderstood area, we will focus on the educational industry, examining section 119(a) and section 119(d). We will review the current law related to employer-provided lodging and set forth during the discussion, a case study and variations of such case study and the respective results when applying section 119 to the facts.



Bob Billig
National Practice Leader



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