Problem 5-41 (LO. 2) Tim is the vice president of western operations for Maroon Oil Company and is stationed in San Francisco. He is required to live in an employer-owned home, which is three blocks from his company office. The company-provided home is equipped with high-speed internet access and several telephone lines. Tim receives telephone calls and e-mails that require immediate attention any time of day or night, as the company's business is spread all over the world. A full-time administrative assistant resides in the house to assist Tim with urgent business matters. Tim often uses the home for entertaining customers, suppliers, and employees. The fair market value of comparable housing is $9,000 per month. Tim is also provided with free parking at his company's office. The value of the parking is $360 per month. a. Complete the statements below regarding Tim's exclusion issue and what he must include in his gross income for 2021. Section 119 excludes from income the value of meals and lodging provided to the employee and the employee's spouse and dependents under the following conditions: • The meals and/or lodging are furnished by the employer on the employer's business premises for the convenience of the employer • In the case of lodging, the employee is required • Tim could argue that this house is an extension of the employer's office conducted in the home. to accept the lodging as a condition of employment. because of the extensive business activities b. The amount associated with the free parking that Tim must include in his gross income per month is $ 90
Problem 5-41 (LO. 2) Tim is the vice president of western operations for Maroon Oil Company and is stationed in San Francisco. He is required to live in an employer-owned home, which is three blocks from his company office. The company-provided home is equipped with high-speed internet access and several telephone lines. Tim receives telephone calls and e-mails that require immediate attention any time of day or night, as the company's business is spread all over the world. A full-time administrative assistant resides in the house to assist Tim with urgent business matters. Tim often uses the home for entertaining customers, suppliers, and employees. The fair market value of comparable housing is $9,000 per month. Tim is also provided with free parking at his company's office. The value of the parking is $360 per month. a. Complete the statements below regarding Tim's exclusion issue and what he must include in his gross income for 2021. Section 119 excludes from income the value of meals and lodging provided to the employee and the employee's spouse and dependents under the following conditions: • The meals and/or lodging are furnished by the employer on the employer's business premises for the convenience of the employer • In the case of lodging, the employee is required • Tim could argue that this house is an extension of the employer's office conducted in the home. to accept the lodging as a condition of employment. because of the extensive business activities b. The amount associated with the free parking that Tim must include in his gross income per month is $ 90
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 5-41 (LO. 2)
Tim is the vice president of western operations for Maroon Oil Company and is stationed in San Francisco. He is required to live in an
employer-owned home, which is three blocks from his company office. The company-provided home is equipped with high-speed internet
access and several telephone lines. Tim receives telephone calls and e-mails that require immediate attention any time of day or night, as
the company's business is spread all over the world. A full-time administrative assistant resides in the house to assist Tim with urgent
business matters. Tim often uses the home for entertaining customers, suppliers, and employees. The fair market value of comparable
housing is $9,000 per month. Tim is also provided with free parking at his company's office. The value of the parking is $360 per month.
a. Complete the statements below regarding Tim's exclusion issue and what he must include in his gross income for 2021.
Section 119 excludes from income the value of meals and lodging provided to the employee and the employee's spouse and dependents
under the following conditions:
• The meals and/or lodging are furnished by the employer on the employer's business premises for the convenience of
the employer
7.
• In the case of lodging, the employee is required
• Tim could argue that this house is an extension of the employer's office
conducted in the home.
to accept the lodging as a condition of employment.
because of the extensive business activities
b. The amount associated with the free parking that Tim must include in his gross income per month is $
90
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