Stephen Is a Furniture Salesman for Foster's Furniture Mart

question 36

Multiple Choice

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.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Joints

The connections between bones, providing support and facilitating movement.

Thrombophlebitis

An inflammatory process causing a blood clot to form and block one or more veins, usually in the legs, leading to swelling and pain.

Skeletal

Relating to the skeleton, the framework of bones that supports the body, protects internal organs, and facilitates movement.

Muscle

A tissue composed of fibers capable of contracting to produce movement or maintain the position of parts of the body.