Include in his gross income

Assignment Help Accounting Basics

Reference no: EM13151344

Two days before Halloween, Rick Z. was driving in his car and noticed that he was low on fuel. He stopped at a gas station which offered a free pumpkin with the purchase of a full tank of gas. Rick believes that the pumpkin has a fair market value of $3.00, and the price of the gasoline was the same as at another station located across the street. Rick knew that this deal was too good to be true and so he took advantage of the offer before the station owner realized what a giveaway this was.

How much should Mr. Z. include in his gross income? Explain your reasoning.

Reference no: EM13151344

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