What is the effect of facts on brian taxable income

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Reference no: EM132707777

Scott Bicycle Manufacturing Ltd. (SBM) is a Canadian controlled private corporation. Brian Mills, one of SBM's employees, was granted stock options on January 15, 2016 for 10,000 shares at $3 per share. The fair market value on January 15, 2016 was $4 per share.
Brian exercised the stock options on September 30, 2016, when the fair market value was $6 per share. In June, 2019, Brian purchased a new home and sold the shares for $7 each.

Problem 1: What is the effect of these facts on Brian's Taxable Income?

Option 1: An increase of $15,000 in 2016

Option 2: An increase of $15,000 in 2019.

Option 3: An increase of $30,000 in 2016.

Option 4: An increase of $20,000 in 2019.

Option 5: None of the above.

Reference no: EM132707777

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