RE:RE:RE:The Insider sales were announced . Let me rephrase (correct) my answer.
The following uses simplified numbers for ease of understanding....
Assume Mr P owned no E3 shares at end of 2022 and had marginal tax rate of 50 %.
Assume Mr P acquired 200,000 shares in 2023 for an average value of $ 1.00 per share.and
the FMV of the shares at time of exercise was $ 2.50 per share.
Mr P would have received a benefit of $ 1.50 per share for a total benefit of $ 300,000.00.
If Mr P were dealing with E3 at arm's length (other employees rec'd similar options & he does not control E3), then his tax owing on the purchase of the shares would be
$ 300,000 @ 50% taxable capital gains rule @ 50% tax rate = $ 75,000.00.
If Mr P were to sell his 60,000 of these shares at $ 3.00 ( for simplicity), he would have a capital gain.
The capital gain would be calculated as the new FMV less his purchase price and taxable benefit on exercising the option. The capital gains rule is that 50 % of the gain is included income.
So....
60,000 @ $ 3.00 - $ 2.50 @ 50 % taxable capital gains rule @ 50 % tax rate =
= $ 7,500.00
So yes, Mr P would owe additional tax on the 2023 sale of the 60,000 shares.
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