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Subject Author Date
Tax implications from an unusual insurance policy. NadCixelsyd 10-25-2007
Posted by Harlan Lunsford on October 28, 2007, 4:04 pm
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 Seth wrote:

(snipped...)

> I would think it does count as income of some sort.

I for one lean towards the rebate on purchases school of
thought.

> A partial refund might not. I've known stores to offer
> "Random percentage (10%-90%) off" sales, where you pick a
> slip to learn your discount after the goods are rung up.
> The price paid is just a sale price, not a taxable event.

And what, pray tell, would be the difference between a full
or partial refund? Would one be taxable while the other not
be?

And since furniture stores carry the most liberal terms,
i.e. 90 days same as cash, when one eventually pays the bill
after 90 days, it is then that the final purchase price is
determined.

As it might just be tonight.
I hope not.

ChEAr$,
Harlan

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Posted by Seth on November 1, 2007, 12:30 am
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> Seth wrote:

> (snipped...)

>> I would think it does count as income of some sort.

> I for one lean towards the rebate on purchases school of
> thought.

Thinking about it more, I agree. I've seen 100% rebates
before, and the likelihood of receiving some of them (e.g.
CompUSA on Norton) is comparable to that of Boston winning
the World Series. And there's been no suggestion that those
are taxable.

Seth

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Posted by kastnna on October 26, 2007, 11:52 pm
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> Way back in March, the Red Sox probably had an 10% chance of
> winning. At this point, I think the Red Sox have about a 70%
> chance of winning. What are the income tax implications for
> the furniture buyers if the Red Sox do win?

Ohhhhh. Terribly sorry. Furniture BUYERS, not furniture
store. That makes more sense. I would think it would be
earned income in the year they received the "refund". They
did not have to give back the furniture so their disposable
income increased by the amount of the refund.

If this is correct (which it may very well not be), does the
furniture STORE issue 1099s?

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Posted by Herb Smith on October 29, 2007, 11:26 pm
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> Last spring, a Massachusetts furniture store offered to
> refund your money on select furniture (bedroom sets?) if the
> Red Sox won the World Series. Sales surged. The furniture
> store covered themselves with an insurance policy, "That
> way, we're rooting for the Red Sox, too".
>
> Way back in March, the Red Sox probably had an 10% chance of
> winning. At this point, I think the Red Sox have about a 70%
> chance of winning. What are the income tax implications for
> the furniture buyers if the Red Sox do win?

I guess a lot of buyers are lining up for their free
furniture this morning :-)

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Posted by Neill Massello on October 29, 2007, 11:26 pm
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> What are the income tax implications for the furniture buyers
> if the Red Sox do win?

I don't see any meaningful distinction between this and
gambling or something like the Publishers Clearing House
Sweepstakes. The outcome wasn't based on pulling a number
out of a hopper but on something that was beyond the control
of the seller or the buyer, equivalent to an aleatory event
with respect to them and the transaction. The buyers were
either actually gambling on the outcome of a sporting event,
with odds of 2-to-1 and the winnings paid in the form of
furniture, or they were getting non-cash prizes. Either way,
wouldn't that be treated as gambling winnings?

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<< The foregoing was not intended or written to be used, >>
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