Wade Woods is an employee of a meat packing plant that allows him to purchase goods at a discount that exceeds the gross proﬁt percentage of the price at which the goods are oﬀered to regular customers. Wade must include the portion of the discounts that exceeds the gross proﬁt percentage in his income.

Question

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According to the IRS, if an employer allows an employee to purchase goods at a discount that exceeds the gross profit percentage, the excess amount must be included in the employee's income. This is considered a taxable fringe benefit.

Wade Woods Is an Employee of a Meat Packing Plant