If you, through your employment or commission, have received options or bought options at a favourable price a benefit occurs.
The liability to tax arises when you acquire the security and the benefit is taxed as ordinary income. The value of the benefit is the difference between the fair market value at acquisition and what you have paid for the security. Any increase of value will thereafter be taxed as capital gain. Loss at disposal of a security is deducted from your gain. The same applies to options that you have not exercised during the duration of the agreement.
The taxed value of the benefit is added to the cost of acquisition when the capital gain is computed.
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