For example, if an staff member bought $100,000 good of trade in for the wage-earner toll tag of $25,000 initial in 2008, they would be taxed on $75,000 significance of "income" for that year. If the worker held on to their stock, as many do, they would still have to pay levy on the $75,000 - even if the stock's value drops to sheer pennies. Employees can delay remitting the tax until they promote the stock or the company is sold, but the toll bill doesn't change. Thousands of tech-industry employees liking for McLeod have been hit since 2000. McLeod bought 10,000 shares in Burnaby, B.C.-based digital-imaging group Creo - with bills borrowed against the have - for $17 each.
At the time, the reserve was trading at $53. She was assessed return burden on $360,000 - the metamorphosis between what she paid and the supermarket value of the shares at that time. She was 27 years obsolete and earning a bashful remuneration of less than six figures.
"On the notification of my financial planner and my accountant, I held on to the shares. And then the shop crashed," she said Ottawa taxed McLeod $100,000 on the commonplace options, even though by the set the pressure was assessed, the shares were merit less than she bought them for. Creo range didn't recover and McLeod said she didn't put together a penny.
The house was eventually sold, and McLeod had to use a train of credit to retaliate the $100,000 bill. "If I had again gone into the set option plan with the concern I am with now, right before the 2008 crash, I would again be in the wrest same situation," McLeod said. Thousands more potentially hit by downturn "People just don't want to bosh about it, and they certainly don't want to venture I be in debt to the regulation a accommodate of a million dollars and I can't takings it," Vancouver cess lawyer William Cooper said. "Right now there are quite thousands of kin under water.
And how many know about this stretch before they get the bill? Not a lot. I would predict very few." Finance Minister Jim Flaherty indicated Ottawa has no blueprint to remedy affected taxpayers. 'I won't hold out any assumption of any tariff exemptions'-Finance Minister Jim Flaherty "The demand laws on to all of us equally," Flaherty said. "There are some remedies that are obtainable through hardship cases, but the actuality is that those stock option situations are not uncommon and solicit to a large include of Canadians.
So, I can't and I won't hold out any wish of any assess exemptions in respect to that." When Flaherty mentioned "hardship" cases, he was favoured referring to JDS Uniphase employees from Victoria. After lobbying by their MP, Gary Lunn, 35 employees with the optical-equipment companionship were granted exemptions from paying the charge terminating year. Nortel employees are another example, but they haven't received any exemptions. Many are still holding on to everyday they bought at the hand scold years ago, when the sell value was over $100 per share.
Federal Finance Minister Jim Flaherty says no exemptions will be granted. (CBC) If Nortel's bankruptcy proceedings enforce the shares to be sold, their colossal overload bills on those shares - value approximately 25 cents each now - will come due. Former Nortel chairman Ragui Kamel, an Ontario resident, said he has already paid $300,000 in taxes on cows he sold and could be hit with another neb soon.
"If Nortel collapses, through no function or taste for of my own, I will be deemed to have sold the [remaining] shares I still hold in Nortel. That will trigger a put a strain on of over $500,000 - wiping out the volume of my savings in 30 years of work," Kamel said. Former Nortel employee contemplates suicide Another old Nortel forewoman from Toronto, who was let go in 1999, said he will get hit with a $204,000 assessment reckoning on merchandise he still owns, which is importance $250.00 now.
The man, who didn't want his tag used, is 69 years broken-down and said he has badly contemplated suicide to dodge being feigned to market his house. "I've been living an nightmare, not sleeping at nights. It's affecting my marriage," he said. Tax barrister Cooper said that, in his involvement with try method makers in Ottawa, the gear of unfair rules are often not enchanted into consideration.
"Sometimes I consider they are just in this bubble. All the technicians are saying, 'Well, this is how the rules knead and this is how they are reputed to profession and it all fits within the map of the Income Tax Act, so what is the problem?' " "I ruminate that the boondocks needs to pluck together and natter to their MPs and raise their mind and let the guidance certain that this isn't acceptable," McLeod said. The United States had a nearly the same encumber rule until 2008, when the regulation was changed to essentially contrive the problem for American employees who desperate money through stock options. "The reality that we are the only G7 realm to do this still is kind of embarrassing. It's charming archaic," McLeod added.
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