Question

Describe when meals and lodging provided to an employee may be excluded from the employee's gross income under IRC § 119.

a. When provided for the convenience of the employer
b. When the employee resides on-site
c. When the meals are business-related
d. When the lodging is temporary

Answer 1

Meals and lodging provided to an employee may be excluded from the employee's gross income under IRC § 119 when provided for the convenience of the employer, when the employee resides on-site, and when the lodging is temporary.

Step-by-step explanation:

Under IRC § 119, meals and lodging provided to an employee may be excluded from the employee's gross income under certain circumstances:

1. When provided for the convenience of the employer: If the employer provides meals and lodging to an employee for the employer's convenience, rather than as a form of compensation, it can be excluded from the employee's gross income. For example, if an employee is required to live on-site for security or availability reasons, the meals and lodging provided would be considered for the employer's convenience.
2. When the employee resides on-site: If an employee lives on-site, the value of meals and lodging provided can be excluded from their gross income. However, there are certain conditions that need to be met, such as the lodging being on the business premises and it being necessary for the job.
3. When the lodging is temporary: If the lodging provided is temporary in nature, such as when an employee stays in a hotel for a short-term business assignment, it can be excluded from the employee's gross income.