Stephen is a furniture salesman for Foster's Furniture Mart. Stephen purchases a bedroom suite from Foster's for $8,000 . The sticker price is $11,000 . Foster's policy is to "discount" all customer purchases for up to $1,000 off of the sticker price for purchases over $10,000 . What is the tax treatment of Stephen's furniture purchase?
I. Stephen does not need to account for the furniture
purchase since it is for his personal use.
II. Stephen has imputed income because of the nature of the furniture purchase.
a. Only statement I is correct.
b. Only statement II is correct.
c. Both statements are correct.
d. Neither statement is correct.
b
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