income). If the difference between your purchase price and the FMV represents a qualified employee discount, do not include the difference in income. However, your basis in the property is still its FMV. See Employee Discounts in Publication 15-B. Restricted Property If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested unless you make the election discussed later. Property becomes substantially vested when your rights in the property or the rights of any person to whom you transfer the property are not subject to a substantial risk of forfeiture. There is substantial risk of forfeiture when the rights to full enjoyment of the property depend on the future performance of substantial services by any person. When the property becomes substantially vested, include the FMV, less any amount you paid for the property, in income. Example. Your employer gives you stock for services performed under the condition that you will have to return the stock unless you complete 5 years of service. The stock is under a substantial risk of forfeiture and is not substantially vested when you receive it. You do not report any income until you have completed the 5 years of service that satisfy the condition. Fair market value. Figure the FMV of property you received without considering any restriction except one that by its terms will never end. Example. You received stock from your employer for services you performed.