Under the page :" Publicity traded shares, mutual fund units, deferral ... " why do I need to enter box 38 from my T4?

[Mehrdadufile]

Hi,  

When I want to report my company's shares that I sold, why do I need to enter the value from box 38 of T4? 

I can see that this value affects my schedule 3 form. 

[Geo123]

Hello

Box 38 of your T4 slip is the amount of employee stock purchase option benefits. This amount is already included in T4 box 14.

To claim the deduction, you will also need to indicate the portion that is eligible as a stock option deduction.  Your employer must provide this amount if applicable.
In the section T4 footnotes at the bottom of the T4 page, select the correct stock option deduction box and enter the corresponding amount from your T4 slip.
The program will then claim the proper deduction on line 24900 of the federal income tax return and on line 297 of the Quebec income tax return.

 

[Mehrdadufile]

Hi, 

Thanks for the reply, but my main question was that when I sold my company's stock and wanted to enter the info in the Ufile page with the title " Publicity traded shares, mutual fund units, deferral ....."  There is a box that says " Stock options benefits included as employment income (T4 box 38)"   , so my question is if I need to enter the value in this box from my T4 box 38?  If I do that it will change schedule 3 form column 3.   Is this correct? 

Thanks,

 

[Geo123]

Hello,

Box 38 of your T4 is added to the Adjusted Cost Base thereby reducing your capital gains. 

Enter the stock option benefits realized with the disposition of employee stock option shares.

This amount should be entered to avoid double taxation on the benefits already included as employment income from the T4 slip or as a disposition of deferred stock option shares.

[Mehrdadufile]

Thanks again for your reply.

Now my question is if I should enter the whole value of box 38 in T4 for each of the stocks of my company that I sell, or just the amount that is the portion of that stock.

For example my box 38 shows 100k, but I sold 50 of my company's stock and that base amount is 10k. I assume I need to only enter 10k in the box " Stock options benefits included as employment income (T4 box 38)  not the whole amount from box 38 in T4 .  Am I correct?

[Geo123]

Hello Mehrdadufile,

Please contact UFile Support so we may review the file confidentially and so we may have all the relevant details of the file
For telephone support, please call: 514-733-8414 or 1-888-633-8414.  Please specify that you were asked to send in a confidential (and anonymous) file.
An agent can review the issue with you.
If you prefer, you can also open a request ticket on-line https://www.ufile.ca/contact/contact-us

[Joy Layne]

Im still confused.. there is an amount in box 38 of my t4, I understand its included in box 14, BUT DO i enter it anywhere else on my tax return??

[Geo123]

Hello Joy Layne,

UFile – Employee Stock Options – T4 Box 38 Benefit (included in Box 14) / NOTE is Capital Gain when sell / security option deduction
1. On the "Left-side menu of the Interview tab", select "T4 and employment income".

2. On the screen to your right, choose between "T4 income earned outside Quebec" and "T4 and RL-1 (Relevé 1) income earned in Québec" depending on your province of residence.

3. Please note that the benefit on "Stock Option Benefit" in box 38 of the T4 is included in box 14. You will find box 38 in the middle of the page.

4. The boxes for "Security option deduction" that are entered in box 39 or 41 can be found in the drop-down list located at the bottom of the line "Other Information" (click on the triangle to see the list of choices)". Make your choice based on the box on your T4. In the field preceded by the sign "$", enter the amount on your T4.

At the far right of the screen, there is an icon of the plus sign "+". By clicking on this icon, another line is generated to enter additional information, if necessary.

For more information, please visit the following link:

For the CRA:

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/financial/security-options.html

We recommend that you carefully read each topic of this link.

For Revenu Québec :

https://www.revenuquebec.ca/en/citizens/income-tax-return/completing-your-income-tax-return/completing-your-income-tax-return/line-by-line-help/276-to-297-taxable-income/line-297/point-2/

1.  

[Taxpayer2023]

Hello Joy and Mehrdadufile, I was wondering if you were able to get clarification on your questions? I was wondering the same things. There is an amount in box 38 of my T4 and no amounts in box 39 and 41. I know for a fact that you should not enter the total amount of box 38 in each of your Capital Gains tab as this would end up addinng up as excessive loss on your Schedule 3. I was told by UFile support to include box 38 amount in only one of your Capital Gains tabs. That being said, after reading the explation bubles in UFile and the links to the CRA explanations, I can't say I really understand what that field does. In fact, the CRA website states "Box 38 - Security options benefits Do not report this amount on your tax return. This amount is already included in box 14". If anyone can help me understand this section, that would be appreciated!

[Geo123]

Hello Taxpayer2023,

1. On the "Left-side menu of the Interview tab", select "T4 and employment income".
2. On the screen to your right, choose between "T4 income earned outside Quebec" and "T4 and RL-1 (Relevé 1) income earned in Québec" depending on your province of residence.
3. Please note that the benefit on "Stock Option Benefit" in box 38 of the T4 is included in box 14. You will find box 38 in the middle of the page.
4. The boxes for "Security option deduction" that are entered in box 39 or 41 can be found in the drop-down list located at the bottom of the line "Other Information" (click on the triangle to see the list of choices)". Make your choice based on the box on your T4. In the field preceded by the sign "$", enter the amount on your T4.

At the far right of the screen, there is an icon of the plus sign "+". By clicking on this icon, another line is generated to enter additional information, if necessary.
For more information, please visit the following link:
For the CRA:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/benefits-allowances/financial/security-options.html
We recommend that you carefully read each topic of this link.
For Revenu Québec :
https://www.revenuquebec.ca/en/citizens/income-tax-return/completing-your-income-tax-return/completing-your-income-tax-return/line-by-line-help/276-to-297-taxable-income/line-297/point-2/

 NOTE is Capital Gain when sell / security option deduction
>> t4 box 38
Use on Capital Gain entry ONLY if benefit not included on T4 Box 38 **