2. Security option deduction (Line 297)
Your deduction is equal to the total of the amounts shown in boxes L-9 and L-10 of your RL-1 slip.
If you cashed out your security option rights without acquiring securities, you are entitled to the security option deduction, provided an amount is shown in box L-8 of your RL-1 slip, or in box 86 of your T4 slip (if you did not receive an RL-1 slip). If you are entitled to the deduction, enter on line 297 the amount shown in box L-9 of your RL-1 slip. If you did not receive an RL-1 slip, enclose a copy of your T4 slip with your return and contact us.
If you are including a taxable benefit in your income on line 101 because you disposed of shares or mutual fund units and had previously elected to defer taxation of the benefit until the year you disposed of the securities, you can enter, on line 297, an amount equal to 25% of the benefit included on line 101.
Special rules apply if, on line 101, you include a taxable benefit related to a stock option, and all three of the statements below apply to your situation.
- You carried out the duties of a foreign specialist:
- at an international financial centre;
- in the Montréal international trade zone at Mirabel, for a corporation that carried on an eligible business; or
- for a corporation operating a stock exchange business or a securities clearing-house business.
- During the period in which you were entitled to deduct all or part of your income from all sources, you acquired stock options further to an agreement with your employer (or former employer) or a person related to your employer (or former employer).
- You are no longer entitled to deduct all or part of your income from all sources.
For more information, contact us.
You can enter an additional deduction on line 297 equal to 50% of the taxable benefit included on line 101 because you exercised a security option if all of the following conditions are met:
- You donated mutual fund units or listed shares to a charity or other qualified donee in the year you acquired them, but no later than 30 days following the acquisition.
- You are including a taxable benefit on line 101 because you exercised an option to purchase such securities in 2022.
- There is an amount in box L-9 of your RL-1 slip.
If you are entitled to the additional deduction and the fair market value of the units or shares at the time of the donation was less than their value at the time the option was exercised, contact us to determine the amount you can deduct.
New rules apply to some security options granted under contracts concluded after June 2021, and the underlying securities may not be eligible for the security option deduction or the additional deduction for donated securities as a result. Contact your employer to find out whether the securities underlying your security options granted after June 2021 are eligible.