Question

Which of the following fringe benefits received by an employee would be excluded from the employee’s gross
income?
1. Employer-provided parking.
2. Dues to an athletic club paid for by the employer.
3. Tickets to the basketball game tonight.
4. Employer-provided interior decorating for a new personal residence.

1 and 2

1 and 3

2 and 4

1, 3, and 4

Flag this Question

Question 210 pts

Short Company allows a 20% discount to all non-officer employees. Officers, all highly compensated, are allowed a 30% discount on company products. Short’s gross profit is 35%. Which of the following is true?

An officer who takes a 30% discount must include the extra 10% (30%-20%) in gross income.

All discounts taken by employees are includible because the plan is discriminatory.

All discounts taken by officers (30%) are includible because the plan is discriminatory.

None of the discounts are includible in income because the discount in all cases is less than the company’s gross profit percentage.

Answer 1

1.

Additional benefit in excess of worker’s salary provided by the employer is a fringe benefit.

Exclusion from gross indicates non-taxable amount.

Facilities for athletic is an exclusion from gross; qualified amount of parking fee has an exclusion from gross income of employee. Therefore, (1) and (2) are correct.

Answer: 1 and 2