Fringe Benefits
Response to the following problem:
A retailer gives a 20% discount to its full-time employees; key employees are entitled to a 30% discount. During the year, two full-time employees, Fritz and Tad, each buy goods that sell for $2,000. Fritz is a key employee; Tad is not. Discuss the tax consequences to Fritz and Tad of the discounts they each received during the year.