Bison Financial Group Has a Health-Care Plan for All Employees

question 62

Multiple Choice

Bison Financial Group has a health-care plan for all employees. Dan, an employee, is single and owns 10% of Bison Financial. In 2014, the company paid $2,000 for Dan's health plan. Which of the following are correct statements? I. If Bison Financial Group is an S corporation, Dan must report the $2,000 as income and can deduct the $2,000 as an itemized medical expense deduction. II. If Bison Financial Group is a partnership, Dan must report the $2,000 as income and can deduct $2,000 as a deduction for AGI.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements are correct.
• D) Neither statement is correct.

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