(F) On-premises athletic facility Which is an on-premises athletic facility as defined in section 132(j)(4)(B). (2) Special rules For purposes of applying paragraph (1), an activity described in section 212 shall be treated as a trade or business. (3) Regulations Under the regulations prescribed to carry out this section, the Secretary shall include regulations— (A) defining entertainment, amenities, recreation, amusement, and facilities for purposes of this subsection, (B) providing for the appropriate allocation of depreciation and other costs with respect to facilities used for parking or for on-premises athletic facilities, and (C) specifying arrangements a primary purpose of which is the avoidance of this subsection. . (b) Exception for certain expenses includible in income of recipient (1) Expenses treated as compensation Paragraph (2) of section 274(e) is amended to read as follows: (2) Expenses treated as compensation Expenses for goods, services, and facilities, to the extent that the expenses do not exceed the amount of the expenses which are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer’s return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages). . (2) Expenses includible in income of persons who are not employees Paragraph (9) of section 274(e) is amended by striking to the extent that the expenses and inserting to the extent that the expenses do not exceed the amount of the expenses that . (c) Exceptions for reimbursed expenses Paragraph (3) of section 274(e) is amended to read as follows: (3) Reimbursed expenses (A) In general Expenses paid or incurred by the taxpayer, in connection with the performance by him of services for another person (whether or not such other person is the taxpayer’s employer), under a reimbursement or other expense allowance arrangement with such other person, but this paragraph