Mila’s post
Mike’s doubts on whether the rent-free apartment is also tax-free are justified since Tara does not elaborate to mike what the tax laws say about fringe benefits. In the context of salaries and compensation, fringe benefits refer to additional benefits an employee is entitled to apart from the regular compensations. In Mike’s case, the rent-free apartment is meant to enhance convenience while in duty. According to Internal Revenue Service (IRS) Publication 15-B, some of the benefits exempted from taxation include lodgings on business premises and working condition benefits (Roin 2019). For meals and lodging benefits to be exempted from taxation, IRS directs that meals and lodgings should be provided exclusively on the employer’s business premise and also provided out of employer’s own volition and convenience. From Mike’s case, the apartment is confined within the business premise and it is given to him out of the employer’s own will so that the employee will conveniently work for 10 hours in a week. Therefore, with this in mind, we can safely conclude that as Tara suggests, the apartment will indeed be exempted for tax.
Over time, I have been concerned with the way IRS conducts fringe benefits valuation. For instance, the rules for tax exemption are complex and only apply to the benefits listed by IRS, meaning that any other benefit not listed, regardless of how crucial it is, will be subjected to taxation.
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On the other hand, we reflect on the definition of a true Christian and adherence to the Ten Commandments. The bible specifically emphasizes that the hand that gives is blessed than the hand that receives and we only become Christians by helping those in need. Mike’s employer is an exemplary Christian who gives Mike a free apartment to put up in, despite paying him 10 dollars per hour.
Ren’s post
It is important to first understand what the 121 exclusion is and how it affects home sales. This is another policy by IRS that allows individuals to be on the gaining side in case the individual decides to sell his primary residence at a maximized limit without paying taxes associated with capital gains. Section 121 enables individuals selling their residences to access tax exemption for every $250000 gained from the sales. For a couple, the section exempts them from tax for every $50000 accruing from the sales of the houses. The qualification that the home seller must meet is to have held the home as a primary residence for at least 2 years out of the preceding 5 years. The couple in this context has been living in the home for the last 24 years, hence they are eligible for the 121 tax exemption policy. The Internal Residence Code does not restrict the two minimum years to be continuous, therefore the home seller can combine the other time he spent in the residence to meet the two-year qualification (Slemrod 2016). Therefore, since the couple lived in the primary house for the required minimum of 3 years, it is eligible for tax exemption according to the 121 tax policy.
The couple moved into a more spacious house after the husband relocates from his previous work station. The husband’s new job is the onset of a new destiny, which the couple should work hard to maintain. In the book of Colossians 3, the Bible says, “Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ." Therefore, the couple should remain focused and hopeful despite the challenges on their way.
References
Roin, J. (2019). The Case for (and against) Surrogate Taxation. Va. Tax Rev. , 39 , 239.
Slemrod, J. (2016). Tax compliance and enforcement: New research and its policy implications.
