Congratulations to the Red Sox. And congrats, too, to folks who bought furniture this spring at Jordan's Furniture.
According to the Boston Globe, the local chain promised free furniture to customers who bought items between March 7 and April 16 if the Sox won the World Series.
Last night's victory means that the Warren Buffett-owned furniture retailer, which notes that it is the "Official Furniture Store of the Boston Red Sox," will be paying back millions to customers.
And, of course, there are tax issues. TaxProf enumerates them:
- Is the store owner required to give each of the customers a Form 1099-Misc? Jordan's says yes.
- Can the customers avoid reporting income on the transaction by treating it as a rebate of the purchase price?
- What is the customers' basis in the furniture?
- Can the transaction instead be treated as a wager (a purchase of both the furniture and a lottery ticket to win back the purchase price)?
You can see an interview here of store executive Eliot Tatelman on the deal and why the retailer believes the promotion is worth it.