All of the long$-$term employees of Salter Inc. are allowed to participate in the company's stock

option plan. In January $2021,$ Sharon Poulter was granted options to acquire $410$ Salter Inc. shares

at a price of $$32\mathrm{.}00$ per share.

At the time of exercise, the Salter Inc. shares have a FMV of $$37\mathrm{.}80$ per share.

On November $15,2023,$ the $410$ Salter Inc. shares are sold.

Required: Indicate the income tax effect for Sharon of the transactions that took place during

$2021,2022,$ and $2023$ under each of the following independent cases. Your answer should include

the effect on both net income and taxable income.

Case $4$ Salter Inc. is a Canadian public company with gross revenues of $$725$ million. At the

time the options were granted, the company's shares were trading at $$34\mathrm{.}00$ per

share. The options are exercised on February $28,2022.$ When the shares are sold, the

proceeds of disposition are $$31\mathrm{.}00$ per share.