The employees of the Sierra Airways are given free flights to the ski resorts if there are empty seats on flights. The cost of such flights would be about $300 per employee.

The employees must include the value of the flights in their gross income

the employees are not required to include the value of the flights in their gross income because this is a no additional cost fringe benefit

the employee is required to include the value of the flights in their gross income only if the employee would otherwise have bought the flights

the employee can exclude the value of the flights from their gross income because the employees were not given the option of receiving cash