[cleung]

I have a client who receive shares as compensation for consulting service rendered. I would have thought this shares should be treated as capital gain, like a stock options for start ups, employees received from CCPC shares, which will not be taxable as income until they are realized. Am I correct? Or do they become taxable income with the current market price of those shares?

The only similar situation I encountered before is for start ups where the "sell shares" to "buy" sweat equity without acutally folk out money to pay employees or contractors. I would have thought the same thing applies to service rendered as a consulting to another company.

Anyone have deal with the same situation? Any help would be greatly appreciated. Thanks.

[JohnNP]

suggest you suggest to your client that he has his tax accountant check the sales records of his business for current and past years and compare them to the tax returns, before he gets prosecuted for underreporting income,evading income tax, and misappropriatioon of trust funds (gst/hst).

it seems that he has an exposure to this possibility, as do the other folks you mention.

the income tax act (and excise tax act) require that all income be reported, not just 1/2 or none of it :(


please do not suggest to him that he treat them for tax purposes in the way that you have posted, as that would not be correct

notwithstanding that you have comingled and mixed up at least 4 different types of income above and want to treat them the same, section 9 income has got nothing to do with section 7 income, nor section 6 income, nor section 38 income

please be careful - software is only a calculation aid