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C. Food, Property Insurance, Property Taxes, Remodeling,
Landscaping, Maintenance and Repair, Utilities, Telephone,
and Depreciation
1. Section 119: Employer-Provided Meals and Lodging
We next decide whether the food and lodging expenses are
employer-provided meals and lodging expenses, excludable from the
Weeldreyers’ income under section 119 and deductible by Dreyer
Farms under section 162.
Meals and lodging furnished to an employee by his employer
are excluded from the employee’s gross income under section 119
if the meals and lodging are provided for the convenience of the
employer on the premises of the employer. In the case of
lodging, the employee must be required to accept the lodging on
the business premises of his employer as a condition of
employment.
Meals and lodging are furnished for the “convenience of the
employer” if there is a direct nexus between the meals and
lodging furnished and the asserted business interests of the
employer served thereby. McDonald v. Commissioner, 66 T.C. 223,
230 (1976). Petitioners assert that Mr. Weeldreyer, as the
corporation’s sole employee, was required to be available for
duty 24 hours a day.
Dreyer Farms leased the Weeldreyer farm to the Weeldreyers.
Dreyer Farms contracted with Mr. Weeldreyer as a tenant, not as
its employee, to perform all necessary work.
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