Kevin must take in $2,500 into his gross income. This is for the reason that the $13,000 ($70,000 -$57,000) discount got on the M3 is bigger than the qualified employee discount of$10,500 (sales price of $70,000 multiplied by the average gross profit percentage of 15%). There is no gross income from the acquisition of the 530 because the $9,000 ($63,000 - $54,000) reduction is less than the qualified employee discount of $9,450 ($63,000 multiplied by the average gross profit percentage of 15%).
