I have a minister that has rolled monies from his church pension plan in the mid 1980s to an IRA. His CPA is now stating that he can take a distribution from the IRA and designate them as housing allowance which would make the distribution tax free. Two questions:

1. Can this be done out of an IRA?
2. If it cannot be completed out of the IRA, could the monies be transferred back into a 403(b) account and then distributed as a housing allowance?

Thanks!