6 Canada-US Rental Income Tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to canada-us rental income tax work, not a general example.
Case Study 1 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $22,000 Saved Each Year — Emigrant Who Left Canada, Red Deer
Client: An emigrant who left Canada mid-year · Where: Red Deer, Alberta · Engagement: 7 weeks, fixed fee
Annual saving$22,000
Tax on reorganisationDeferred
Elections filedOn time
The situation
An emigrant who left Canada mid-year in Red Deer, Alberta 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
We mapped the current structure, modelled the target, and filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund — with the tax-deferred elections filed on time and the supporting valuations documented.
The result
The reorganisation completed without triggering tax, and the new structure saves approximately $22,000 a year while removing the exposure the old one carried.
Case Study 2 · Backlog brought current
4 Years Filed, $12,500 Removed From The Assessed Balance — US Citizen Living in, Ottawa
Client: A US citizen living in Canada · Where: Ottawa, Ontario · Engagement: 8 weeks, fixed fee
Years filed4
Assessed balance removed$12,500
CollectionsStopped
The situation
A US citizen living in Canada in Ottawa, Ontario had not filed for 4 years. The CRA had issued arbitrary assessments, and the business was carrying foreign accounts that had passed the $100,000 T1135 threshold three years earlier on top of a growing interest balance.
What we did
We started with the oldest year and worked forward so each year's closing balances fed the next. We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely, filing the years in sequence rather than all at once.
The result
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $12,500 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 3 · Sale and succession
$190,000 Sheltered By The Lifetime Capital Gains Exemption — Canadian with a US, Windsor
Client: A Canadian with a US employer · Where: Windsor, Ontario · Engagement: 5 weeks, fixed fee
Gain sheltered$190,000
ClosingOn schedule
Share qualificationMet
The situation
A Canadian with a US employer in Windsor, Ontario had an offer on the table and 22 months to close. The shares did not qualify for the capital gains exemption, and a shareholder loan balance that would have been picked up as income on closing was part of the reason.
What we did
We purified the corporation so the shares met the qualifying tests, then reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused well ahead of the closing date.
The result
The sale closed on schedule with $190,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 4 · Records and systems rebuilt
Month-End Close Cut From 12 Weeks To 5 Days — Canadian Corporation with US, Hamilton
Client: A Canadian corporation with US customers · Where: Hamilton, Ontario · Engagement: 3 weeks, fixed fee
Close time before12 weeks
Close time after5 days
Year-endReview, not rebuild
The situation
The accounting file at a Canadian corporation with US customers in Hamilton, Ontario was built on a US LLC taxed as a corporation in Canada, producing double tax on the same income. The year-end had taken 12 weeks each of the last three years.
What we did
We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward and moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result
The file reconciles. Month-end closes in 5 days instead of 12 weeks, and the year-end is a review rather than a reconstruction.
Case Study 5 · Deadline rescue
Filed On Time From A Standing Start, $116,000 Penalty Avoided — Inbound Transferee on Assignment, Barrie
Client: An inbound transferee on assignment · Where: Barrie, Ontario · Engagement: 4 weeks, fixed fee
Penalty avoided$116,000
Turnaround4 weeks
FiledOn time
The situation
An inbound transferee on assignment in Barrie, Ontario came to us 4 weeks before its filing deadline with US tax paid but no foreign tax credit claimed on the Canadian return. A late filing would have triggered a penalty of roughly $116,000 before interest.
What we did
We worked backwards from the deadline. We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund, prioritising the items that actually gated the filing and deferring everything that did not.
The result
The return was filed on time and complete. The $116,000 penalty never arose, and the compliance calendar we set means the next deadline is scheduled rather than discovered.
Case Study 6 · Objection and relief
Notice Of Objection Allowed In Full, $77,000 Reversed — Snowbird Spending Winters in, Halifax
Client: A snowbird spending winters in Arizona · Where: Halifax, Nova Scotia · Engagement: 10 weeks, fixed fee
Amount reversed$77,000
ObjectionAllowed in full
Account balanceNil
The situation
A snowbird spending winters in Arizona in Halifax, Nova Scotia had been reassessed for $77,000 and had 8 days left on the objection deadline. The reassessment rested on 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net.
What we did
We filed the objection inside the deadline with a complete submission rather than a placeholder, and filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely.
The result
The appeals officer allowed the objection in full. $77,000 was reversed and the account returned to a nil balance.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
