Damn you MC for volunteering my services during tax season! I.m sending you a bill for this! lol
I have not dealt with options/warrants in my career so consult your own tax adviser for specific advice on the subject but my memory from the textbook days is that essentially warrants generally have a cost base of zero because they are set higher than the SP when granted. WHen you exercise the warrant, the price you pay for the shares at that time is your cost base plus any amount paid for the warrant if applicable. If you sell or transfer to an RRSP or TFSA, you are taxable for the difference b/w the value at time of sale or transfer and your cost base as a capital gain which is 50% taxable.
Options granted to employees are taxed a little differently. There is a taxable benefit(taxed as regular employment income) for the difference between option price and share price at time of exercise(no taxable implication at time of granting the option) with the amount of benefit incuded in taxable income added to the cost base of shares acquired(essentially cost base is share price at time of exercise). When shares sold, capital gain for selling price less adjusted cost base. There are/were other special rules for shares in Qualified small business corps but these rules would not apply here.
Hope this helps some and if Jimbo can find any "inconsistencies" in the above or has more experience in this area, I will gladly pass the torch.
CHeers!
