Mike is working his way through college and trying to make ends meet. Tara, a friend, is graduating soon and tells Mike about a really great job opportunity. She is the onsite manager for an apartment complex catering to students. The job entails working in the office for about 10 hours a week, collecting rent each month, and answering after-hours emergency calls. The pay is $10 per hour, plus a rent-free apartment (worth about $500 per month). Tara then tells him the best part: the rent-free apartment is tax-free as well. Knowing that you are a tax student, Mike asks you if the rent-free apartment is really tax free or if this is just another scam. Explain to Mike whether the compensation for the apartment is really a nontaxable fringe benefit.