Accounting Services for Sole Proprietors Case Studies
6 worked Accounting Services for Sole Proprietors case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to accounting services for sole proprietors work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$67,000 In Credits Claimed That Prior Filings Had Missed — Incorporating Proprietor, Surrey
Client: A proprietor preparing to incorporate · Where: Surrey, British Columbia · Engagement: 10 weeks, fixed fee
Credits claimed$67,000
Years adjusted6
Review outcomeNo adjustment
The situation — A proprietor preparing to incorporate, Surrey, British Columbia
A proprietor preparing to incorporate in Surrey, British Columbia had been filing for 6 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat a profit split applied in practice that the written agreement did not support.
What we did for A proprietor preparing to incorporate, Surrey, British Columbia
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we drafted the allocation, admission and withdrawal terms into a written agreement before the next partner was admitted.
The result — A proprietor preparing to incorporate, Surrey, British Columbia
$67,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · Sale and succession
Share Sale Restructured, $520,000 Less Tax On Closing — Corporate-Partner Partnership, Regina
Client: A partnership with a corporate partner · Where: Regina, Saskatchewan · Engagement: 9 weeks, fixed fee
Tax saved on closing$520,000
PriceAs agreed
Post-closing adjustmentsNone
The situation — A partnership with a corporate partner, Regina, Saskatchewan
A partnership with a corporate partner in Regina, Saskatchewan was preparing to sell. Due diligence surfaced passive assets sitting inside the operating company, disqualifying the shares. That would have reduced the price or killed the deal outright.
What we did for A partnership with a corporate partner, Regina, Saskatchewan
We cleaned up the historical file. We rewrote the partnership allocation to match how the practice actually operated, effective for the following fiscal year. Then we prepared the due-diligence package the buyer's advisers actually asked for.
The result — A partnership with a corporate partner, Regina, Saskatchewan
The deal closed at the agreed price. $520,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Case Study 3 · Backlog brought current
Collections Halted And $30,000 Cut From A 6-Year Backlog — Property Joint Venture, Barrie
The situation — A joint-venture property partnership, Barrie, Ontario
By the time a joint-venture property partnership in Barrie, Ontario called, 6 years were outstanding. The CRA had assessed on estimates. Underneath it sat a profit split applied in practice that the written agreement did not support.
What we did for A joint-venture property partnership, Barrie, Ontario
We reconstructed the records year by year. We split the shared overhead on a documented basis, so each partner’s reported share carried only the expenses that belonged to it. Each filing replaced an arbitrary assessment with a real one.
The result — A joint-venture property partnership, Barrie, Ontario
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $30,000, and a relief application addressed part of the accumulated interest.
Case Study 4 · Structure rebuilt
Holding Structure Added, $9,500 Saved Annually — Farming Partnership, Vancouver
Client: A farming partnership · Where: Vancouver, British Columbia · Engagement: 4 weeks, fixed fee
Annual saving$9,500
ReorganisationTax-neutral
StructureMatches operations
The situation — A farming partnership, Vancouver, British Columbia
The structure at a farming partnership in Vancouver, British Columbia needed fixing. The file was carrying an incorporation completed without the section 85 election, triggering an unnecessary gain. Every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did for A farming partnership, Vancouver, British Columbia
We worked with the client's lawyer. Together, we filed the section 85 election with correct elected amounts and rolled the assets in without a taxable disposition. We also prepared the elections, resolutions and valuations the structure needed to stand up.
The result — A farming partnership, Vancouver, British Columbia
The structure now matches the business. Annual saving of $9,500, and the reorganisation itself was tax-neutral.
Case Study 5 · Objection and relief
$57,000 Of Penalties And Interest Cancelled On Relief — Sole Proprietor Consultant, Halifax
Client: A sole proprietor consultant · Where: Halifax, Nova Scotia · Engagement: 6 weeks, fixed fee
Penalties and interest cancelled$57,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A sole proprietor consultant, Halifax, Nova Scotia
An assessment of $57,000 landed at a sole proprietor consultant in Halifax, Nova Scotia following a desk review. It turned on three partners operating on a handshake, with no written agreement covering allocations or a departure. The auditor had not seen the records behind it.
What we did for A sole proprietor consultant, Halifax, Nova Scotia
We filed the outstanding T5013 returns with full partner allocations and requested penalty relief on the basis of the first-time nature of the failure. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A sole proprietor consultant, Halifax, Nova Scotia
$57,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Client: A two-partner architecture practice · Where: Kitchener, Ontario · Engagement: 10 weeks, fixed fee
Penalty cancelled$76,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A two-partner architecture practice, Kitchener, Ontario
A two-partner architecture practice in Kitchener, Ontario had already missed one deadline and was about to miss a second. Behind it sat partner draws that had pushed one partner’s adjusted cost base negative. A penalty of $76,000 was accruing.
What we did for A two-partner architecture practice, Kitchener, Ontario
We split the work into what had to happen before the deadline and what could follow it. Then we reconciled each partner’s allocation, capital account and drawings, so what was reported for tax matched the agreement instead of the cash taken.
The result — A two-partner architecture practice, Kitchener, Ontario
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $76,000 of the penalty already assessed on the earlier year.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
