Ace Limited granted Ms Smart stock options to purchase previously unissued fullypaid shares of the corporation at $ per share. The fair market value at the time of the grant was $ She had to exercise half of the options immediately upon being granted the option and she did so The corporation provided her with a loan of $ on August to buy the shares. The loan agreement required the payment of monthly interest on the last day of each month at per annum. The principal was payable in four annual instalments due on the anniversary date of the loan each year. Assume that the prescribed rates of interest for are: in the first quarter, in the second quarter, in the third quarter and in the fourth quarter.
Required:
A Determine it's effect on Gloria Smarts employment income for tax purposes for Show all calculations whether or not necessary to the final answer.
B Indicate why you did not include any of the above amounts in your answer.
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