Q4 (General Fringe Benefits). Problem #45 | a: Jim, b: Mabel, c: Lori, and d: Melissa [Hint: c assume Dolph uses the facility for 12 months.

45. LO4 Determine whether the taxpayer has received taxable income in each of the following situations. Explain why any amount(s) may be excluded: a. Jim is an employee of Fast Tax Prep, Inc. All employees of Fast Tax Prep are eligible for a 50 percent discount on the preparation of their income tax returns. Jims tax return preparation would normally have cost $300, but he paid only $150 because of the discount. b. Mabel is a lawyer for a large law firm, Winken, Blinken, and Nod. Winken pays Mabels annual license renewal fee of $400 and her $300 annual dues to the American Lawyers Association. Mabel also takes advantage of Winkens educational assistance plan and receives payment for the $6,000 cost of taking two night school courses in consumer law. c. Lori Company runs a nursery near its offices. Employees are allowed to leave their children at the nursery free of charge during working hours. Nonemployees may also use the facility at a cost of $300 per month per child. Dolph is an employee of Lori with two children who stay at Loris facility while Dolph is at work. d. At the sporting goods store where Melissa works, her employer lets all employees buy goods at a 40 percent discount. Melissa purchases for $300 camping and fishing supplies that retail for $500. The goods had cost her employer $250.