A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $11,400,000. The amounts paid for these fringe benefits are as follows Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by four owners. Owners other Employees Group term life insurance $500,000 $1,200,000 Meals and lodging incurred for the convenience of the employer Pension plan H.R. 10 (Keogh) plan for partnership and S corporation 300,000 550,000 $160,000* $480,000 a. The taxable income of the business entity, if it is a partnership, is If the entity is a C corporation, it is $ , and if the entity is an S corporation, it is b. Indicate whether the following statements are "True" or "False" regarding the effects on the owners for each of the three business forms. Greater-than-2% shareholders of an S corporation are treated the same as employees for fringe benefit purposes. 1. 2. For group term life insurance and meals and lodging to be treated as fringe benefits, the individual must be an employee. For the owner-employees of a partnership or an S corporation who have contributions made to their H.R. 10 plans by the business entity, the amounts paid must be included in their gross income. 3. A business entity's taxable income before the cost of certain fringe benefits paid to owners and other employees is $11,400,000. The amounts paid for these fringe benefits are as follows Note the following: (1) Assume the fringe benefit plans are not discriminatory and (2) The business entity is equally owned by four owners. Owners other Employees Group term life insurance $500,000 $1,200,000 Meals and lodging incurred for the convenience of the employer Pension plan H.R. 10 (Keogh) plan for partnership and S corporation 300,000 550,000 $160,000* $480,000 a. The taxable income of the business entity, if it is a partnership, is If the entity is a C corporation, it is $ , and if the entity is an S corporation, it is b. Indicate whether the following statements are "True" or "False" regarding the effects on the owners for each of the three business forms. Greater-than-2% shareholders of an S corporation are treated the same as employees for fringe benefit purposes. 1. 2. For group term life insurance and meals and lodging to be treated as fringe benefits, the individual must be an employee. For the owner-employees of a partnership or an S corporation who have contributions made to their H.R. 10 plans by the business entity, the amounts paid must be included in their gross income. 3