E3 Lithium Ltd V.ETL

The Insider sales were announced .

[LiAuAgScV]

Options become taxable immediately on exercise ,They are selling to pay tax , as announced.

[sicnarf2]

Doesn't selling to pay tax create more tax owing ?

[Loughatorick]

No. The tax payable on the share purchase (normally calculated using capital gains rules) is based on the difference between the FMV and the option price at the time of exercise  Later when the shares are sold, the capital gain would be calculated on the selling price less the cost for tax purposes, essentially the FMV of the shares at the time they were originally acquired.

[Loughatorick]

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

[PuerSimia]

Great post Loughatorick. Thanks. Would the following apply to JP: New Rules. As of July 1, 2021, the New Rules limit the availability of the Stock Option Deduction to an annual maximum of $200,000 in a calendar year (the Annual Vesting Limit) calculated based on the fair market value of the underlying securities on the date of the grant.

[UNKLAL]

Yes, but if you don't have the cash to exercise the warrants, that would expire, you would sell some shares. Usually the warrants that are being exercised are 2-3 baggers!!! UNKLAL

[sicnarf2]

That's what I thought , Unk ,your absolutely right !