Acco340Lecture 2-3 - Employment Income

No deferral of public shares arising from an employee

Info icon This preview shows pages 20–21. Sign up to view the full content.

View Full Document Right Arrow Icon
, no deferral of public shares arising from an employee benefit due to exercising options in publicly traded shares 2. For Canadian Controlled Private Corporation (CCPC)Shares     if the option price on the grant date was greater than the FMV of the shares then although ITA 110(1)(d) deduction is also not available , however , a similar 50% deduction under ITA 110 (1)(d.1) is available, as long as the shares are held 2 years after their acquisition Note: Deferral of employee taxable benefits was not relevant when exercising options on CCPC shares , as there never was any income inclusion pursuant to exercising options to acquire on CCPC shares .      CASH PAYMENT IN LIEU OF SHARES: For options issued after March 4,2010- if employee elects to receive cash in lieu of exercising options to  receive shares-  ITA 110(1)(d) or (d.1) deduction will be available only if the employer files an election to not claim a deduction for the cash paid                                                                                                                                                                                                                                                                           SUMMARY                                                              Stock Options Employee Benefit                                                              1. Setting the Option Price   -at FMV                             - $10                           = no immediate or future adverse tax consequences      - greater than FMV             -greater than $10        = same as above -  less than FMV                  -less than $10             = adverse future tax consequences                                                                    If options are for Public shares:                                                                    - no ITA 110(1)(d) 50% deduction on employee benefit on exercising option                                                                   - no deferral for reported taxable benefit  for options exercised before Mar. 4,2010
Image of page 20

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 21
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern