LO4 Billy Bob is employed by Pony Ranch Corporation and owns 1% of the corporation's stock. The corporation provides excludable meals and lodging for Billy Bob at a cost of $12,000 annually.
a. Can Pony Ranch Corporation deduct the costs of the meals and lodging provided to Billy Bob?
b. How are the meals and lodging treated for tax purposes if Pony Ranch is an S corporation?
c. Assume the same facts as in part b, except that Billy Bob owns 5% of Pony Ranch Corporation.