Which of the following correctly describes the tax treatment of health and accident insurance premiums paid by an S corporation and purchased in the S corporation's name on behalf of more-than-2% shareholders? The health and accident insurance premiums are:
a. Deducted as wages on Form 1120-S, page 1, and included on the shareholder's Form W-2, box 1.
b. Reported as a separately-stated item on Form 1120-S, Schedule K, and passed through to sareholders on Schedule K-1 (Form 1120-S).
c. Deducted as an employee benefit program on Form 1120-S, page 1, and passed through to shareholders in the form of a reduced share of ordinary business income.
d. Not reported on Form 1120-S, but are eligible for the self-employed health insurance deduction on the individual shareholders' Forms 1040.