Calculate the employment benefit from the stock options

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Problem

Taxable Income and Credits Calculation In 2025, Sarah, a Canadian resident, earns $60,000 in employment income and receives a $3,000 pension income. She exercises 2,000 stock options from a public corporation with an exercise price of $10 per share and a market value of $25 per share at exercise. She qualifies for the full Basic Personal Amount (BPA, estimated at $14,400) and the pension income amount ($2,500) at a 14.5% tax rate.

1. Calculate the employment benefit from the stock options included in her taxable income.

2. Calculate her total tax credits from the BPA and pension income amount. Get the instant assignment help.

3. If a 50% deduction applies to the stock option benefit, what is the net amount added to her taxable income from the stock options?

Reference no: EM133928381

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