Where relevant and identify the effects separately

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Problem 1: Jerry Farrow is employed by a Canadian controlled private corporation. In 2018, he was granted options to acquire 625 of his employer's shares at $92 per share. At that time, it was estimated that the fair market value of the shares was $90. In 2019, when the estimated fair market value of the shares is $95 per share, he exercises all of these options. In 2020, he sells 125 of the shares for $85 per share. Indicate the tax consequences of the events in 2018, 2019, and 2020 on Mr. Farrow's Net Income For Tax Purposes and on his Taxable Income. Where relevant, identify these effects separately.

Reference no: EM132671253

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