I'm Canadian, and I executed a "same-day-buy-and-sell" on options granted to me by my employer.

My T4 slip has the appropriate taxable benefit called out, but my question is, can I apply my previous year's capital losses to this "gain" to reduce some of my taxes payable?

  • What exactly do you mean by "same-day-buy-and-sell"? Do you mean that you exercised your options first then sold the shares? Another possibility is that a broker sold short shares on your behalf and covered the short with you employee stock option shares. The tax implications are slightly different for each.
    – alx9r
    Sep 25, 2012 at 15:50

1 Answer 1


As I recall, the gain for ISOs is considered ordinary income, and capital losses can only negate up to $3000 of this each year.

If you exercised and held the stock, you have ordinary income to the exercise price, and cap gain above that, if you hold the stock for two years.

EDIT - as noted below, this answer works for USians who found this question, but not for the OP who is Canadian, or at least asked a question at it relates to Canada's tax code.

  • 1
    Is this for Canada? Apr 15, 2012 at 23:43
  • 1
    Nope, getting glasses this week! I missed "Canada" completely, sorry. Apr 16, 2012 at 0:09

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