Mallard Corporation furnishes meals at cost to its employees by means of a cafeteria it maintains.The cost of operating the cafeteria is not subject to the cutback adjustment.

Question

Quizplus · Accepted Answer

The fact that the cost of operating the cafeteria is not subject to the cutback adjustment means that it is a qualified plan under the Internal Revenue Code. Therefore, Mallard Corporation can provide meals to its employees at cost without violating any tax regulations.

Mallard Corporation Furnishes Meals at Cost to Its Employees by Means