Last year Acme paid Ralph $15000 to install a new air-conditioning unit at its

Last year Acme paid Ralph $15000 to install a new air-conditioning unit at its headquarters building. The air conditioner did not function properly and
this year Acme requested that Ralph return the payment. Because Ralph could not repair one critical part in the unit he refunded the cost of the repair
$5000 to Acme.

a. Is Ralph required to include the $15000 payment he received last year in his gross income from last year?

b. What are the tax implications of the repayment if Ralph was in the 35 percent tax bracket when he received the $15000 payment from Acme but was in the
28 percent tax bracket when he refunded $5000 to Acme?

c. How would you answer part b. if Ralph refunded $2500 to Acme and not $5000?