Final answer:
Working condition fringe benefits are property or services provided to an employee so that the employee can perform their job, such as a company car for business use, and are a non-taxable fringe benefit. Cash awards, use of athletic facilities not owned or operated by the employer, and meals for business travel without an overnight stay are typically taxable.
Step-by-step explanation:
An example of a non-taxable fringe benefit is b. Working condition fringe benefits. These benefits include property or services provided to an employee so that the employee can perform their job. For instance, the provision of a company car for business trips or a professional training seminar are considered working condition fringe benefits if they are primarily for the benefit of the employer and business-related. This is different from a. Cash awards, which are typically taxable, c. An athletic facility not owned or operated by the ER, which would likely be taxable as well, and d. Meals for business travel with no overnight stay, which are generally taxable unless specific exceptions apply.
To further illustrate, consider the opportunity cost associated with work events. When employees attend a company-sponsored retreat to improve team spirit, the cost of the event is not just the out-of-pocket costs for consultants, room, and board. There is also the opportunity cost of the work not being completed during this time—a concept essential in understanding the true expense of work-related activities and benefits.