Sue works part-time as a waitress at Busy Burger. Busy Burger allows all employees a...
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Sue works part-time as a waitress at Busy Burger. Busy Burger allows all employees a 40 percent discount for any food that they buy and consume on the premises.
During 2016, the value of this 40 percent discount for Sue amounted to $2,500 for days on which she was working at Busy Burger (she ate during mealtime at work), and $1,500 for days on which she did not work but still stopped by after class during mealtimes. How much gross income must Sue recognize for 2016 with respect to the discount plan? Will she be able to deduct the 40% discount under Section 132 Certain Fringe Benefits, or Section 119 Meals and lodging furnished by the employer, or both?
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