6 worked Canada-US Capital Gains 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 canada-us capital gains tax work, not a specific client's file.
Case Study 1 · Records and systems rebuilt
Month-End Close Cut From 12 Weeks To 4 Days — Cross-Border Contractor, Victoria
Client: A contractor working on both sides of the border · Where: Victoria, British Columbia · Engagement: 9 weeks, fixed fee
Close time before12 weeks
Close time after4 days
Year-endReview, not rebuild
The situation — A contractor working on both sides of the border, Victoria, British Columbia
The accounting file at a contractor working on both sides of the border in Victoria, British Columbia had a weak foundation. It was built on winters spent in the United States with the day count kept casually and no residency position documented anywhere. The year-end had taken 12 weeks each of the last three years.
What we did for A contractor working on both sides of the border, Victoria, British Columbia
We aligned the Canadian and US reporting of the same income so the foreign tax credit claim carried support on both returns. We also moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — A contractor working on both sides of the border, Victoria, British Columbia
The file reconciles. Month-end closes in 4 days instead of 12 weeks, and the year-end is a review rather than a reconstruction.
Case Study 2 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $48,000 Saved Each Year — US-Facing Canadian Corporation, Vancouver
Client: A Canadian corporation with US customers · Where: Vancouver, British Columbia · Engagement: 7 weeks, fixed fee
Annual saving$48,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A Canadian corporation with US customers, Vancouver, British Columbia
A Canadian corporation with US customers in Vancouver, British Columbia had outgrown the structure it started with. 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A Canadian corporation with US customers, Vancouver, British Columbia
We mapped the current structure and modelled the target. Then we registered the payer for a non-resident withholding account, remitted the Regulation 105 amounts due, and applied for waivers covering the rest of the contract. The tax-deferred elections were filed on time and the supporting valuations documented.
The result — A Canadian corporation with US customers, Vancouver, British Columbia
The reorganisation completed without triggering tax, and the new structure saves approximately $48,000 a year while removing the exposure the old one carried.
Case Study 3 · Missed incentive claimed
$106,000 In Credits Claimed That Prior Filings Had Missed — Canadian on US Payroll, London
Client: A Canadian with a US employer · Where: London, Ontario · Engagement: 5 weeks, fixed fee
Credits claimed$106,000
Years adjusted3
Review outcomeNo adjustment
The situation — A Canadian with a US employer, London, Ontario
A Canadian with a US employer in London, Ontario had been filing for 3 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat a US LLC taxed as a corporation in Canada, producing double tax on the same income.
What we did for A Canadian with a US employer, London, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward.
The result — A Canadian with a US employer, London, Ontario
$106,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 4 · Planning that cut the bill
$37,500 Cut From The Annual Tax Bill — Florida Property Owner, Barrie
Client: A family with a Florida vacation property · Where: Barrie, Ontario · Engagement: 11 weeks, fixed fee
First-year saving$37,500
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A family with a Florida vacation property, Barrie, Ontario
A family with a Florida vacation property in Barrie, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly. It still left foreign accounts that had passed the $100,000 T1135 threshold three years earlier on the table.
What we did for A family with a Florida vacation property, Barrie, Ontario
We modelled the current position against the alternatives before changing anything. Then we reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked.
The result — A family with a Florida vacation property, Barrie, Ontario
The change saved $37,500 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 5 · Deadline rescue
3-Week Turnaround Beat The Deadline And Saved $38,000 — Arizona Snowbird, Ottawa
Client: A snowbird spending winters in Arizona · Where: Ottawa, Ontario · Engagement: 3 weeks, fixed fee
Late-filing penalty avoided$38,000
Filed with23 days to spare
Next yearPapers ready
The situation — A snowbird spending winters in Arizona, Ottawa, Ontario
A snowbird spending winters in Arizona in Ottawa, Ontario was weeks away from the deadline for Canada-US capital gains tax. Behind that sat a departure year filed as a normal resident return with no deemed disposition reported. The exposure if the date slipped was around $38,000.
What we did for A snowbird spending winters in Arizona, Ottawa, Ontario
We reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A snowbird spending winters in Arizona, Ottawa, Ontario
Filed with 23 days to spare. $38,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 6 · Backlog brought current
Collections Halted And $46,000 Cut From A 5-Year Backlog — Inbound Assignee, Regina
Client: An inbound transferee on assignment · Where: Regina, Saskatchewan · Engagement: 10 weeks, fixed fee
Balance reduced by$46,000
Backlog cleared5 years
CollectionsHalted
The situation — An inbound transferee on assignment, Regina, Saskatchewan
By the time an inbound transferee on assignment in Regina, Saskatchewan called, 5 years were outstanding. The CRA had assessed on estimates. Underneath it sat dividends paid to a non-resident shareholder with nothing withheld, leaving the payer holding the liability.
What we did for An inbound transferee on assignment, Regina, Saskatchewan
We reconstructed the records year by year. We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. Each filing replaced an arbitrary assessment with a real one.
The result — An inbound transferee on assignment, Regina, Saskatchewan
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $46,000, and a relief application addressed part of the accumulated interest.
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.
