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How much must she include in her gross income

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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.

Reference no: EM131785267

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