Determine the tax consequences to the employee of the following fringe benefits.

(a) A bottle of ketchup sells for $6.00 at retail. Heinz makes $5.00 of profit on each bottle. Heinz plans to offer ketchup to all employees for 25 cents per bottle.

Amount Excluded from Employee’s Income: ________________

Amount Included in Employee’s Income: ________________

(b) Heinz plans to offer all employees free transit passes (worth $310 per month).

Amount Excluded from Employee’s Income: ________________

Amount Included in Employee’s Income: ________________

(c) Steve is the Chief Executive Officer at Heinz. Holly is Steve’s wife. Every Christmas, Steve asks his personal assistant to shop for a gift for Holly. The assistant spends two hours shopping for the gift. The assistant is an hourly employee who makes $40 per hour.

Amount Excluded from Employee’s Income: ________________

Amount Included in Employee’s Income: ________________