Sarah Is an Executive at Robin Yogurt

Multiple Choice

Sarah is an executive at Robin Yogurt.Because she loves the yogurt so much,in the current year she decides to buy a yogurt machine from Robin for $9,300.The machine cost the company $9,000 (the wholesale price) ,and it has a fair market value of $12,500 (price at which sold at retail) .Only executives are permitted to buy yogurt machines at a discount.What is Sarah's adjusted basis for the yogurt machine and how much must she include in her gross income?

A) $9,300 basis,$3,500 gross income.
B) $9,300 basis,$3,200 gross income.
C) $12,500 basis,$3,500 gross income.
D) $12,500 basis,$3,200 gross income.
E) None of the above.