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Sarah is an executive at Robin Yogurt. Because s...

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Question

Sarah is an executive at Robin Yogurt. Because she loves the yogurt so much, in the current year she decides to buy a yogurt machine from Robin for $9,300. The machine cost the company $9,000 (the wholesale price), and it has a fair market value of $12,500 (price at which sold at retail). Only executives are permitted to buy yogurt machines at a discount. What is Sarah?s adjusted basis for the yogurt machine and how much must she include in her gross income? a. $9,300 basis, $3,500 gross income. b. $9,300 basis, $3,200 gross income. c. $12,500 basis, $3,500 gross income. d. $12,500 basis, $3,200 gross income. e. None of the above.

 

Paper#7676 | Written in 18-Jul-2015

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