Ted Was Shopping for a New Automobile

question 26

Essay

Ted was shopping for a new automobile. He found one that met his needs and agreed to purchase it for $23,000. He had shopped around and concluded that he could not get a better price from another dealer. After he had paid for the automobile, the dealer called to notify Ted that he was entitled to a manufacturer's rebate of $1,500. The next week he received a $1,500 check from the manufacturer. How much should Ted include in gross income?

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Definitions:

Lessee

A person or entity who leases or rents property from another called the lessor.

Patent Holder

An individual or entity that legally owns the rights to an invention as recognized by a patent.

Assignee

An individual or entity to whom rights or interests have been transferred by another, known as the assignor.

Assignor

A person or entity that transfers rights or interests in a contract or property to another party, known as the assignee.