Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 6 has two parts - You are an employee of a Canadian public corporation. On February 1, 2019 you received options to purchase
Question 6 has two parts - You are an employee of a Canadian public corporation. On February 1, 2019 you received options to purchase 5,000 shares of your employer's common stock at a price of $75 per share. You exercised the options and purchased 5,000 shares on March 1, 2019. You sold all of the shares on June 1, 2020. The market price of her employer's common stock was $74 per share on February 1, 2019; $79 per share on March 1, 2019 and $85 per share on June 1, 2020. Hint: Net Income is Division B and Taxable Income is Division C. Part one-(2 marks - show calculations) The effect on your 2019 tax return is: A) increase in Net Income for Tax Purposes of $12,500; increase in Taxable Income of $12,500. B) Increase in Net Income for Tax Purposes of $25,000; increase in Taxable Income of $12,500. C) increase in Net Income for Tax Purposes of $10,000, increase in Taxable Income of $10,000. D) increase in Net Income for Tax Purposes of $20,000; increase in Taxable Income of $10,000. Part two (2 marks - show calculations)The effect on her 2020 tax return is: - A) increase in Net Income for Tax Purposes of $15,000; increase in Taxable Income of $15,000. B) increase in Net Income for Tax Purposes of $30,000; increase in Taxable Income of $15,000. C) increase in Net Income for Tax Purposes of $25,000; increase in Taxable Income of $25,000. D) increase in Net Income for Tax Purposes of $50,000; increase in Taxable Income of
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started