Prepare a client memo that recommends the adoption

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Question - Able Corporation is a closely held company engaged in the manufacture and retail sales of automotive parts. Able maintains a qualified pension plan for its employees but has not offered nontaxable fringe benefits.

You are a tax consultant for the company who has been asked to prepare suggestions for the adoption of an employee fringe benefit plan. Your discussions with the client's chief financial officer reveal the following:

Employees currently pay their own premiums for medical and health insurance.

No group term life insurance is provided.

The company owns a vacant building that could easily be converted to a parking garage.

Many of the employees purchase automobile parts from the company's retail outlets and pay retail price.

The president of the corporation would like to provide a dependent care assistance program under Sec. 129 for its employees.

Required - Prepare a client memo that recommends the adoption of an employee fringe benefit program. Your recommendations should discuss the pros and cons of different types of nontaxable fringe benefits.

Reference no: EM132561761

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