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Notice: The information on this page is only for users of Personal Taxprep 2018. If you are using Personal Taxprep Classic 2018, consult the help available in the program. |
If an individual acquired shares or mutual fund units following an agreement with his or her employer and, at the time of exercising the options, advised the employer of his or her choice to defer the benefit from these securities to the year of sale, the following calculation must be made to know the value of the benefit to include in income if he or she sold shares or mutual fund units during the year which were part of this choice.
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Number of shares |
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(Fair market value of the share or unit at the time of acquisition |
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Minus: amount paid for the acquisition of the share or the unit Minus: amount paid for the acquisition of the security option). |
The value of the benefit thus determined may give rise to a deduction for share or unit options in a mutual fund trust of 25% (under section 725.3 TA) or 50% (under section 725.3.1 TA).
The maximum benefit that may be deferred is subject to annual vesting limit of $100,000. The excess is not eligible for the deferral.
An eligible employee is an employee who:
- deals at arm’s length with the employer and any related corporation; and
- owns less than 10% of all classes of the corporation’s shares.
See Also