Ch.3- Employment Income Flashcards
Stock options
Total income to account for: POD on sale VS original price of shares
Total income incl:
1. Employment income = (FMV at exercise -price paid for shares X sh’s
If sold:
2. Capital gains/loss= proceeds on sale to 3rd party - FMV at exercise X shs
Stick options - 3 transactions
- granting
- Exercise of the option (purchase)
- Sale of share
Stock options CCPC
Employment inclusion occurs same time shares disposed
Granting- no tax
Exercise: tax deferred
Sale:
Exercise and sale taxed
Inclusion:
(@ selling date) BOTH CALCULATIONS
=
Emp inc: #sh’s x (FMV of shs option price)
CG/CL: #shs sold x( POD - FMV shs at exercise)
* not incl bc CG not Enployment inc*
X1/2
Stock options: public company
Inclusion:
@exercise date:
#shs exercised x (FMV of shs when exercised -option price )
@selling date:
CG/CL: #shs sold X ( POD - FMV is shs at exercise date )
not included bc CG not employment income
X1/2
Automobile standby charge : index
A: lesser of
- Total personal use ins driven during period
- Venue determined for B during days auto available
B: 1667km x ( total available days/30) -> if A= B , A/B=0
C: full original cost of employer owned vehicle incl HSTV
D: (total available days employer owned automobile / 30)
E: lease pmts incl HST made by employer
F: portion of lease pmts that pertains to insurance for loss/damages
Auto stand by charge: Employer owned car formula
A/B X (2% X (C X D)
Auto stand by charge: Employer LEASED car:
A/B x (2/3 (E-F) )
Auto benefits: operating costs benefit
- for personal use of employer owned auto , if paid by employer = taxable benefit
Km method:
personal use 50% +
Pers km X 0.25 prescribed rate
Biz use 50% +
= 50% of reduced stand by charge
Allowance
A taxable benefit
Reimbursement
Generally not a taxable benefit
Taxable benefit:
Creates inequity between taxpayers
Offered solely for personal enjoyment
All expense paid trips taken for pleasure
