But expenses can be deducted from the company's profit which is essentially his income. So either he gets the game donated, reports it, and then deducts it as a business expense or gets money, buys the game, and deducts its worth as a business expense.That doesn't just mean it's free money he doesn't have to pay taxes on.
I'm not saying he hasn't been fucking up his taxes by not reporting stuff. It just seems like even if he reported everything correctly (dealing specifically with gifted games) it would come out to the same result.
I guess we can go with it being a capital expense which is taxed differently (where you write off the depreciation in value?), but that seems iffy given the small value of used games (or steam library items essentially being 0).