Scott Bicycle Manufacturing Ltd. is a CCPC. Brian Mills, one of the employees, was granted a stock option on October 11, 20X1 for 10,000 shares at $3 per share when market value was $4 per share. Brian exercised the stock option on September 30, 20X4 when the market price was $6 per share. In February 20X9, Brian purchased a new home and sold the shares for $7 each.

What is the effect of the above on Brian's income for tax purposes, assuming Brian wants to minimize taxes?

Question 8 options:

1)

$15,000 in 20X4

2)

$35,000 in 20X9

3)

$30,000 in 20X4

4)

$5,000 in 20X9