6 worked Business Reorganization Tax 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 business reorganization tax work, not a specific client's file.
Case Study 1 · Records and systems rebuilt
Month-End Close Cut From 10 Weeks To 4 Days — Corporation Holding Investments, Brampton
Client: An operating company holding surplus investments · Where: Brampton, Ontario · Engagement: 9 weeks, fixed fee
Close time before10 weeks
Close time after4 days
Year-endReview, not rebuild
The situation — An operating company holding surplus investments, Brampton, Ontario
The accounting file at an operating company holding surplus investments in Brampton, Ontario had a weak foundation. It was built on two corporations under common control filing as if each had its own $500,000 limit. The year-end had taken 10 weeks each of the last three years.
What we did for An operating company holding surplus investments, Brampton, Ontario
We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. We also moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — An operating company holding surplus investments, Brampton, Ontario
The file reconciles. Month-end closes in 4 days instead of 10 weeks, and the year-end is a review rather than a reconstruction.
Case Study 2 · Scaling without breaking
Scaled To 24 Staff With $21,000 Of Working Capital Freed — Incorporated Consultancy, Vancouver
Client: An incorporated consultancy · Where: Vancouver, British Columbia · Engagement: 11 weeks, fixed fee
Headcount reached24
Working capital freed$21,000
Missed deadlinesZero
The situation — An incorporated consultancy, Vancouver, British Columbia
An incorporated consultancy in Vancouver, British Columbia was growing fast, with headcount reaching 24 in eighteen months. The back office had not kept up. A distribution treated as tax-free capital dividend with no election ever filed was the first thing to break.
What we did for An incorporated consultancy, Vancouver, British Columbia
We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — An incorporated consultancy, Vancouver, British Columbia
The business reached 24 staff with no missed remittance and no late filing. $21,000 of working capital was freed in the process.
Case Study 3 · Sale and succession
$685,000 Sheltered By The Lifetime Capital Gains Exemption — Non-Calendar Year-End Corporation, Kitchener
Client: A corporation with a non-calendar fiscal year-end · Where: Kitchener, Ontario · Engagement: 8 weeks, fixed fee
Gain sheltered$685,000
ClosingOn schedule
Share qualificationMet
The situation — A corporation with a non-calendar fiscal year-end, Kitchener, Ontario
A corporation with a non-calendar fiscal year-end in Kitchener, Ontario had an offer on the table and 19 months to close. The shares did not qualify for the capital gains exemption. A minute book with no resolutions behind a decade of dividends was part of the reason.
What we did for A corporation with a non-calendar fiscal year-end, Kitchener, Ontario
We purified the corporation so the shares met the qualifying tests. We reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company. All of it was done well ahead of the closing date.
The result — A corporation with a non-calendar fiscal year-end, Kitchener, Ontario
The sale closed on schedule with $685,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 4 · Objection and relief
Notice Of Objection Allowed In Full, $127,000 Reversed — First-Profit Technology CCPC, Edmonton
Client: A technology CCPC approaching its first profitable year · Where: Edmonton, Alberta · Engagement: 8 weeks, fixed fee
Amount reversed$127,000
ObjectionAllowed in full
Account balanceNil
The situation — A technology CCPC approaching its first profitable year, Edmonton, Alberta
A technology CCPC approaching its first profitable year in Edmonton, Alberta had been reassessed for $127,000. 20 days were left on the objection deadline. The reassessment rested on retained earnings building in the operating company with no plan for extracting them.
What we did for A technology CCPC approaching its first profitable year, Edmonton, Alberta
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 technology CCPC approaching its first profitable year, Edmonton, Alberta
The appeals officer allowed the objection in full. $127,000 was reversed and the account returned to a nil balance.
Case Study 5 · Cash and remittance control
Remittance Schedule Corrected, $65,000 Refunded — Holding and Operating Companies, Victoria
Client: A holding company and its operating subsidiary · Where: Victoria, British Columbia · Engagement: 8 weeks, fixed fee
Overpayment refunded$65,000
Late remittances sinceZero
ScheduleAutomated
The situation — A holding company and its operating subsidiary, Victoria, British Columbia
Remittances at a holding company and its operating subsidiary in Victoria, British Columbia were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat dividends moved up to a holding company year after year with no safe-income support on file.
What we did for A holding company and its operating subsidiary, Victoria, British Columbia
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. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — A holding company and its operating subsidiary, Victoria, British Columbia
Penalties stopped from the following remittance onwards, and $65,000 of overpaid instalments was refunded.
Case Study 6 · CRA review defended
Audit Defence Closed In 3 Weeks, $55,000 Cleared — Import and Distribution Corporation, Winnipeg
Client: An import and distribution corporation · Where: Winnipeg, Manitoba · Engagement: 3 weeks, fixed fee
Proposed tax cleared$55,000
Review duration3 weeks
OutcomeNo change
The situation — An import and distribution corporation, Winnipeg, Manitoba
An import and distribution corporation in Winnipeg, Manitoba was selected for review. A balance-due date the owner believed was the same as the filing date had shown up in the CRA's automated matching. The proposed adjustment on business reorganization tax came to $55,000.
What we did for An import and distribution corporation, Winnipeg, Manitoba
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — An import and distribution corporation, Winnipeg, Manitoba
The review closed with no change. $55,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
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.
