G is employed by a Canadian-controlled private corporation. In year 1, G was granted a stock option

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Question:

G is employed by a Canadian-controlled private corporation. In year 1, G was granted a stock option to acquire 4,000 shares from the treasury of his employer’s corporation for $11 a share. At the time of receiving the option, the shares were valued at $13 per share. In year 3, G exercised his option and purchased 4,000 shares for $44,000. At the purchase date in year 3, the shares were valued at $12 per share. In year 6, G sold 4,000 shares for $17 per share. What amount is included in G’s employment income for tax purposes in year 6?

QUE 2

An employee received an option to purchase shares of a Canadian-controlled private corporation (CCPC) at $8 per share when the value of the stock was $10 per share. This would result in a taxable benefit which would be taxed as…

A)Employment income when the option was exercised.

B)Employment income when the option was granted.

C)Employment income when the shares were sold.

D)A capital gain when the shares were sold.

QUE 3

An employee received an option to purchase shares of a public company at $8 per share when the price of the stock was $10 per share. The $2 difference creates a taxable benefit which would be taxed as…

Multiple Choice

A)Employment income when the option was exercised.

B)Employment income when the option was granted.

C)Property income when the option was exercised.

D)Property income when the option was granted.