Stock Option Exercise

[jpho]

I exercised my company stock options and held the shares. Would the tax withheld already be included on my T4? Also, my brokerage charged an admin fee when I transferred the shares to my personal investing account. When I am calculating the proceeds of disposition can this be deducted?

[Dhruvik]

After you exercise an option or receive free stocks, your employer should note the value of the benefits you received, and he should report that amount in box 14 of your T4 slip. When filing your taxes, add together all of the numbers from box 14 on all of your T4 slips and write that sum on line 101 of your income tax return.

If you receive options as a shareholder rather than as an employee, they are not considered taxable employment benefits. Because of that, they are not reported on box 14 of your T4, but you may have to declare any earnings from these options as capital gains.

Also, you cannot claim any commission or brokerage fees paid from buying, selling, or managing securities. 

For more information, please see the TurboTax article: How Are Security Options Benefits Calculated and Taxed? 

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