3 ms·

That is considered a sales discount (you wouldn’t get a free pizza without buying another one), and as such not taxable. Just as if you’d buy something on a 50%

• gamblor956 2y ago
  This is the correct answer, in the U.S. A sales discount is not income, nor is it a gift (which are not taxable to the recipient, but are possibly taxable to the giver). In dsign's example, where the pizza is from your employer: in the U.S., it would generally be de minimis if it's a one-off or infrequent event. If it's a regular thing though, it generally is considered income unless it's very low value. The I.R.S. ruled long ago that any single item over $100 is not de minimis, but as this was a fairly old ruling, with inflation most practitioners think the modern threshold before the I.R.S. cares is somewhere between $250-$600. Note: I do taxes for a living. While I don't do individual taxes, I deal with gifts to employees, etc., all the time.
  • yardstick 2y ago
    Does the IRS take into account losses by the company? Eg if A Jewellery shop gave employees a special 2-for-1 / BOGOF gold bars, I expect that’d raise lots of red flags?
    • balderdash 2y ago
      Why? now the employee has a large taxable embedded gain on their gold bar when they sell it.
      • yardstick 2y ago
        Capital gains still less than Income Tax?
        • balderdash 2y ago
          But you have to hold if for a year and take the price risk, if you sell it the next day to arb the price you pay ordinary income