22 January 2020 External T.I. 2014-0559281E5 F - T5008 -- summary under Subparagraph 40(1)(a)(i)

The T5508 Guide states:

Report only the total proceeds in box 21. Do not deduct any expenses from the proceeds… .

Respecting the application of s. 49(1) to the writing and sale on an exchange of a naked call option and the T5008 reporting of the transaction “cost” of the option on the T5008 issued by the securities dealer, CRA did not reference the above statement, but effectively confirmed that it did not trench on how the gain was reported by the option writer. It stated:

The CRA's position is that expenses incurred in connection with the granting of an option may be deducted from the proceeds of disposition when calculating a taxpayer's gain.

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