Sam receives 100 stock options in XYC Co, which is a public company. He was granted the stock options in 2016 when the fair market value of the shares was $5 per share, and the exercise price was $6 per share. He exercised his stock options in 2018 when the fair market value was $18 per share. In 2020, Sam plans to sell his 100 shares for S22 per share.(CANADA)

a)What is the tax impact on Sam's income from the stock options in 2016?

b)What is the tax impact on Sam's income from the stock options in 2020?

Stock Options Exercise price (strike price) - $10 FMV at date of grant - $8 FMV at date of exercise - $13 FMV at date of sale - $17 In the money-StrikeFMV Grant Public CCPC Canadian controlle private corporatio Grant date Nothing Nothing $0 Exercise Date - Not in the money $13-10=$3 ($1.50) Sale Date $17-$13=$4 x 50% = $2 $13-10=$3 ($1.50) $17-$13=$4 x 50% = $2 Stock Options Year of Sale Public (Year of Exercise) Employment Income $3 Taxable Capital Gain Net income for tax purposes $3 $2. $2 $0 Stock Option Deduction Taxable Income (1.50) 1.50 $2 CCPC Employment Income Taxable Capital Gain Net income for tax purposes $3 $2 $5 Stock Option Deduction Taxable Income (1.50) 3.50 Stock Options Exercise price (strike price) - $10 FMV at date of grant - $8 FMV at date of exercise - $13 FMV at date of sale - $17 In the money-StrikeFMV Grant Public CCPC Canadian controlle private corporatio Grant date Nothing Nothing $0 Exercise Date - Not in the money $13-10=$3 ($1.50) Sale Date $17-$13=$4 x 50% = $2 $13-10=$3 ($1.50) $17-$13=$4 x 50% = $2 Stock Options Year of Sale Public (Year of Exercise) Employment Income $3 Taxable Capital Gain Net income for tax purposes $3 $2. $2 $0 Stock Option Deduction Taxable Income (1.50) 1.50 $2 CCPC Employment Income Taxable Capital Gain Net income for tax purposes $3 $2 $5 Stock Option Deduction Taxable Income (1.50) 3.50