Employees of the Valley Country Club are allowed to use the golf course without charge before and after working hours on Mondays, when the number of players on the course is at its lowest.Tom, an employee of the country club played 40 rounds of golf during the year at no charge when the non-employee charge was $20 per round.

Question

Quizplus · Accepted Answer

Tom is receiving a "no-additional-cost service" as a fringe benefit, which means that the cost to provide him with this benefit is negligible and does not result in any additional cost to the employer. Under the tax code, such benefits are excluded from the employee's gross income and are not subject to income tax. Therefore, Tom does not need to include anything in his gross income.

Employees of the Valley Country Club Are Allowed to Use