The shareholder-employee can exclude these sums from personal taxation and the corporation can claim a deduction for the cost.
Unless the law expressly excludes it, any fringe benefit you give the recipient is taxable and must be factored into their salary. The exclusions that pertain to particular fringe benefits are discussed in Section 2. Taxable benefits are those that are not exempt from the regulations outlined in section 2.
Basic things are frequently a part of hiring packages and constitute common fringe benefits. Health care, life insurance, financial aid for school, daycare, cafeteria expenses, cafeteria subsidies, below-market loans, employee discounts, employee stock options, and the use of a corporate vehicle for personal use are a few of these.
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