Asset Sale Versus Share Sale Analysis Case Studies
6 worked Asset Sale Versus Share Sale Analysis 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 asset sale versus share sale analysis work, not a specific client's file.
Case Study 1 · Sale and succession
Share Sale Restructured, $465,000 Less Tax On Closing — Two-Shareholder CCPC, Surrey
Client: A CCPC with two shareholders · Where: Surrey, British Columbia · Engagement: 6 weeks, fixed fee
Tax saved on closing$465,000
PriceAs agreed
Post-closing adjustmentsNone
The situation — A CCPC with two shareholders, Surrey, British Columbia
A CCPC with two shareholders in Surrey, British Columbia was preparing to sell. Due diligence surfaced no valuation on file to support the price the parties had agreed. That would have reduced the price or killed the deal outright.
What we did for A CCPC with two shareholders, Surrey, British Columbia
We cleaned up the historical file. We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. Then we prepared the due-diligence package the buyer's advisers actually asked for.
The result — A CCPC with two shareholders, Surrey, British Columbia
The deal closed at the agreed price. $465,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Client: A technology CCPC approaching its first profitable year · Where: Ottawa, Ontario · Engagement: 6 weeks, fixed fee
Proposed tax cleared$131,000
Review duration6 weeks
OutcomeNo change
The situation — A technology CCPC approaching its first profitable year, Ottawa, Ontario
A technology CCPC approaching its first profitable year in Ottawa, Ontario was selected for review. Retained earnings building in the operating company with no plan for extracting them had shown up in the CRA's automated matching. The proposed adjustment on asset sale versus share sale analysis came to $131,000.
What we did for A technology CCPC approaching its first profitable year, Ottawa, Ontario
We reviewed each capital cost allowance pool and set the claim at the level that kept the small business deduction fully used rather than wasted. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A technology CCPC approaching its first profitable year, Ottawa, Ontario
The review closed with no change. $131,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Case Study 3 · Planning that cut the bill
$52,000 Cut From The Annual Tax Bill — Holding and Operating Companies, Vancouver
Client: A holding company and its operating subsidiary · Where: Vancouver, British Columbia · Engagement: 8 weeks, fixed fee
First-year saving$52,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A holding company and its operating subsidiary, Vancouver, British Columbia
A holding company and its operating subsidiary in Vancouver, British Columbia was compliant but paying more than it needed to. The prior year had been filed correctly. It still left a balance-due date the owner believed was the same as the filing date on the table.
What we did for A holding company and its operating subsidiary, Vancouver, British Columbia
We modelled the current position against the alternatives before changing anything. Then we mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request.
The result — A holding company and its operating subsidiary, Vancouver, British Columbia
The change saved $52,000 in the first year and repeats annually. Nothing about the filings became more aggressive. The position is simply the one the rules already allowed.
Case Study 4 · Records and systems rebuilt
19 Months Reconciled And $17,000 Of Input Tax Recovered — Incorporated Trades Business, Lethbridge
Client: An incorporated trades business · Where: Lethbridge, Alberta · Engagement: 5 weeks, fixed fee
Months reconciled19
Input tax recovered$17,000
Close time10 days
The situation — An incorporated trades business, Lethbridge, Alberta
Nothing reconciled at an incorporated trades business in Lethbridge, Alberta. Every filing started with 19 months of cleanup. The file was carrying a small business limit quietly shared across three associated corporations nobody had mapped.
What we did for An incorporated trades business, Lethbridge, Alberta
We rebuilt from source rather than correcting on top of the existing file. We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down. Then we set the routine that keeps it clean.
The result — An incorporated trades business, Lethbridge, Alberta
19 months reconciled to the bank. The close now takes 10 days, and $17,000 of previously unclaimable input tax was recovered in the process.
Case Study 5 · Objection and relief
Notice Of Objection Allowed In Full, $127,000 Reversed — Professional Corporation, Barrie
Client: A professional corporation · Where: Barrie, Ontario · Engagement: 10 weeks, fixed fee
Amount reversed$127,000
ObjectionAllowed in full
Account balanceNil
The situation — A professional corporation, Barrie, Ontario
A professional corporation in Barrie, Ontario had been reassessed for $127,000. 24 days were left on the objection deadline. The reassessment rested on dividends moved up to a holding company year after year with no safe-income support on file.
What we did for A professional corporation, Barrie, Ontario
We filed the objection inside the deadline with a complete submission rather than a placeholder. Alongside it, we rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual.
The result — A professional corporation, Barrie, Ontario
The appeals officer allowed the objection in full. $127,000 was reversed and the account returned to a nil balance.
Case Study 6 · Backlog brought current
$97,000 Of Arbitrary Assessments Vacated After 5 Years — Import and Distribution Corporation, Victoria
Client: An import and distribution corporation · Where: Victoria, British Columbia · Engagement: 9 weeks, fixed fee
Arbitrary tax vacated$97,000
Years brought current5
Account statusCurrent
The situation — An import and distribution corporation, Victoria, British Columbia
5 years of unfiled returns had turned into notional assessments at an import and distribution corporation in Victoria, British Columbia. Underneath lay a loss year carried forward by default when carrying it back would have produced a refund cheque. Collections had already started.
What we did for An import and distribution corporation, Victoria, British Columbia
We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. We then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — An import and distribution corporation, Victoria, British Columbia
All 5 years were accepted as filed. $97,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 5 years.
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.
