Pasqual Melo is employed by a public corporation. On January 1, 2019, she was given an option to purchase 1,000 shares of the public corporation for $8 per share (the option extended for two years).

On December 15, 2019, she exercised her option and bought 1,000 shares at $8 per share (total = $8,000).

On June 15, 2022, she sold 1,000 shares. The value of the shares at the particular dates was as follows:

Date option granted	$ 8.50
Date option exercised	10
Date shares sold	14

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Requlred: Determine the amount and type of income and when that income is taxable. Year Amount FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain Determine the amount and type of income and when that income is taxable if the value of the shares at the date the option was granted was $8 rather than $8.50? FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain Determine the amount and type of income and when that income was taxable if the employer is a Canadian-controlled private corporation FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain Requlred: Determine the amount and type of income and when that income is taxable. Year Amount FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain Determine the amount and type of income and when that income is taxable if the value of the shares at the date the option was granted was $8 rather than $8.50? FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain Determine the amount and type of income and when that income was taxable if the employer is a Canadian-controlled private corporation FMV of shares on exercise date Cost of shares acquired on exercise date Employment Income Stock option deduction Taxable Income When the shares are sold Proceeds from Sale ACB of shares Capital Gain Taxable capital gain

Answer rating: 100% (QA)

solution Selling price 1000 x 14 14000 Value of shares at purchase date 1000 x 10 10000 Capital Gain ... View the full answer