In Year 1, Kayla, an employee of a public company, was granted an option to acquire 100

Question:

In Year 1, Kayla, an employee of a public company, was granted an option to acquire 100 shares from the company’s treasury at a price of $12 per share. At the date that the option was granted, the shares were trading on the stock market at $22 per share. In Year 2, Kayla exercised the option and acquired 100 shares. At that time the shares were trading at $40 per share. In Year 6, Kayla sold the shares for $66 per share.
Discuss the income tax consequences of Kayla’s transactions (show calculations). Income tax reference: ITA 7(1).