Where do I report income from a stock purchase plan discount?

Q: I sold shares of stock that I received from an employee stock purchase plan that allowed us to purchase the stock at a 15% discount. I held the stock for longer than one year. My question is with respect to the 15% discount - I believe this should be reported as ordinary income. I'm just not sure which schedule to put it on. Any thoughts? --Rob, Quincy

The following answer was provided by Mark Misselbeck, CPA, Levine Katz Nannis & Solomon PC, Needham.

A: Provided you not only held the stock for one (1) year after exercise, but two (2) years beyond the date of grant, you must report as compensation the LESSER of: the discount on purchase from the plan; or the gain on the sale. The compensation would be reported on the same line as your W-2 wages.