Joan Smithers has been employed by a Canadian public company for several years. In 2018, she was granted options to acquire 2,200 of her employer's shares at $10.50 per share. At that time, the shares were trading at $10.00 per share. In 2019, when the shares are trading at $15 per share, she exercises all of these options. In 2020 she sells 1,000 of the shares for $13 per share. Indicate the tax consequences of the events in 2018, 2019, and 2020 on Ms. Smithers' Net Income For Tax Purposes and on her Taxable Income. Where relevant, identify these effects separately.

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The Answer of Joan Smithers has been employed by a Canadian public company for several years. In 2018, she was granted options to acquire 2,200 of her employer's shares at $10.50 per share. At that time, the shares were trading at $10.00 per share. In 2019, when the shares are trading at $15 per share, she exercises all of these options. In 2020 she sells 1,000 of the shares for $13 per share. Indicate the tax consequences of the events in 2018, 2019, and 2020 on Ms. Smithers' Net Income For Tax Purposes and on her Taxable Income. Where relevant, identify these effects separately.

Joan Smithers Has Been Employed by a Canadian Public Company