CRA confirms that the s. 110(1)(d.01) gift deduction is unavailable against a s. 7(1)(e) stock option benefit

S. 110(1)(d.01) provides for an additional ½ deduction (so as to result in a nil taxable income inclusion) where the s. 110(1)(d) deduction was available for a s. 7(1)(a) stock option benefit and there is a timely gift of the optioned security to a qualified donee. CRA confirmed that this deduction is not available to reduce a s. 7(1)(e) benefit realized on death notwithstanding a donation of the shares following death by, for example, the estate to a qualified done.

Neal Armstrong. Summary of 7 October 2020 APFF Roundtable Q. 6, 2020-0851631C6 F under s. 110(1)(d.01).