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Sparrow Corporation would like you to review its employee fringe benefits program with regard to the tax consequences of the plan for the company's president (Polly), who is also the majority shareholder. For the following items, indicate what amount, if any, is included in Polly's gross income If an amount is zero, enter"0" If an amount is zero, enter "0". a. 0 C. The company has a qualified retirement plan. The company pays the cost of employees attending a retirement planning seminar. The employee must be within 10 years of retirement, and the cost of the seminar is $1,500 per attendee. b. The company owns a parking garage that is used by customers, employees, and the general public. Only the general public is required to pay for parking. The charge to the general public for Polly's parking for the year would have been $3,600 (a $300 monthly rate). All employees are allowed to use the company's fixed charge long-distance telephone services, as long as the privilege is not abused. Although no one has kept track of the actual calls, Polly's use of the telephone had a value (what she would have paid on her personal telephone) of approximately $600. d. The company owns a condominium at the beach, which it uses to entertain customers. Employees are allowed to use the facility without charge when the company has no scheduled events. Polly used the facility 10 days during the year. Her use had a rental value of $1,000. The company is in the household moving business. Employees are allowed to ship goods without charge whenever there is excess space on a truck. Polly purchased a dining room suite for her daughter. Company trucks delivered the furniture to the daughter. Normal freight charges would have been $750 f. The company has a storage facility for household goods. Officers are allowed a 20% discount on charges for storing their goods. All other employees are allowed a 10% discount. Polly's discounts for the year totaled $900. ! ! ! e. 900 Starting in 2009, Chuck and Luane have been purchasing Series EE bonds in their name to use for the higher education of their daughter Susie, who currently is age 18. During the year, they cash in $12,000 of the bonds to use for freshman year tuition, fees, and room and board. Of this amount, $5,000 represents interest. Of the $12,000, $8,000 is used for tuition and fees and $4,000 is used for room and board. Chuck and Luane's AGI, before the educational savings bond exclusion, is $126,950. Review 5 135, and answer the following questions. If an amount is zero, enter "o". a. Chuck and Luane, who will file a joint return, and Susie want to understand the tax consequences. For each statement below, help them by indicating whether the statement is "True" or "False", The Series Es savings bonds quality as educational savings bonds. True The room and board for a dependent quality as higher education expenses. False Since the redemption amount exceeds the qualified higher education expenses, only part of the True Interest qualities for exclusion Chuck and Luane's savings bond exclusion is not subject to any phase-out provision False If Chuck and Luane file a Joint, how much is the savings bond exclusion? Round any division to five decimal places. Round your final answer to the nearest dollar. X
