Cal Curns purchases furniture from his employer for $5,000 during 2019. The fair market value of the furniture is $8,500.

1. What amount, if any, must Cal include as income for 2019?

2. What is Cal's basis in the furniture?

3. In May 2017, Spiromatic, Inc. sold land with a basis to Spiromatic of $20,000, to Joe Jones, its 70% shareholder, for $8,000. In July, Joe sold the land to an unrelated party for $25,000. What is the amount of Jack's recognized gain?