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Nigel buys an option for $1,000 which allows him to purchase a block of shares for $40,000. Which of the following statements is NOT correct?
Nigel buys an option for $1,000 which allows him to purchase a block of shares for $40,000. Which of the following statements is NOT correct?
Select one:
a. If Nigel sells the option for $700, he has an allowable capital loss of $350.
b. If Nigel purchases the shares, the adjusted cost base of the shares will be $41,000.
c. If Nigel allows the option to expire, the vendor has a taxable capital gain of $500.
d. If Nigel allows the option to expire, he has an allowable capital loss of $500.
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