maybe.
Taxpayer orders online from Home Depot web site 4 patio chairs, table and umbrella. Orders are shipped via common carrier with no shipping charge. Seller maintains 1 800 number for customer contact; no email. Chairs cost 55$ apiece plus tax, but we'll ignore the sales tax. Shipment arrives, direct from factory. Instead of 4 chairs, factory ships 4 "units", i.e. 2 chairs to a box. Repeated attempts to contact Home Depot via 1800 number comes to naught since lines are always overloaded. when a human (probably a supervisor trying to take care of some overload) is contacted, his reaction is that customer has probably obtained four free chairs! He is put on notice of course of the error and the ball is in Home Depot's court. No further contact after six weeks. Now, here's the tax part. How would you vote?
A. customer taxpayer has 4 free chairs, zero basis, and therefore a gift; no tax consequences. B. Customers has income to the tune of 220$, taxable.
C. customer sells chairs for 55 apiece; with basis already taxed, zero profit. D. customer sells chairs and therefore has 55 apiece income. E. (any other possibility?
have fun.
ChEAr$, Harlan Lunsford, EA n LA Thursday June 15th 2006