6 worked Corporate Amalgamation 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 corporate amalgamation work, not a specific client's file.
Case Study 1 · Records and systems rebuilt
19 Months Reconciled And $16,500 Of Input Tax Recovered — Buyout Shareholder, Lethbridge
Client: A shareholder buying out a departing co-owner · Where: Lethbridge, Alberta · Engagement: 7 weeks, fixed fee
Months reconciled19
Input tax recovered$16,500
Close time9 days
The situation — A shareholder buying out a departing co-owner, Lethbridge, Alberta
Nothing reconciled at a shareholder buying out a departing co-owner in Lethbridge, Alberta. Every filing started with 19 months of cleanup. The file was carrying all future growth accruing to shares the founder already held, with no freeze in place.
What we did for A shareholder buying out a departing co-owner, Lethbridge, Alberta
We rebuilt from source rather than correcting on top of the existing file. We cleared the inter-company balances and the shareholder loan before the reorganisation closed. We papered each step with the resolutions and agreements the structure has to rest on. Then we set the routine that keeps it clean.
The result — A shareholder buying out a departing co-owner, Lethbridge, Alberta
19 months reconciled to the bank. The close now takes 9 days, and $16,500 of previously unclaimable input tax was recovered in the process.
Case Study 2 · Missed incentive claimed
$50,000 Credit Claim Filed And Accepted Without Adjustment — Investment-Heavy Operating Company, Edmonton
Client: An investment-heavy operating company · Where: Edmonton, Alberta · Engagement: 9 weeks, fixed fee
Claim value$50,000
AcceptedWithout adjustment
RepeatableAnnually
The situation — An investment-heavy operating company, Edmonton, Alberta
An investment-heavy operating company in Edmonton, Alberta assumed the credits did not apply to a business its size. A capital dividend account balance that would have been lost on dissolution had the final distribution gone ahead as planned meant they had applied all along.
What we did for An investment-heavy operating company, Edmonton, Alberta
We identified the qualifying activity and built the documentation to support it. Then we wound the subsidiary up into its parent under subsection 88(1) and moved the property across at its cost amounts. We closed the subsidiary program accounts once the final return had been assessed.
The result — An investment-heavy operating company, Edmonton, Alberta
$50,000 recovered. Because the eligibility analysis is on file, the same claim can be repeated each year with a fraction of the effort.
Client: A family-owned manufacturer planning succession · Where: Halifax, Nova Scotia · Engagement: 9 weeks, fixed fee
Penalty cancelled$117,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A family-owned manufacturer planning succession, Halifax, Nova Scotia
A family-owned manufacturer planning succession in Halifax, Nova Scotia had already missed one deadline and was about to miss a second. Behind it sat an investment portfolio accumulating inside the operating company, putting the qualified small business corporation tests at risk. A penalty of $117,000 was accruing.
What we did for A family-owned manufacturer planning succession, Halifax, Nova Scotia
We split the work into what had to happen before the deadline and what could follow it. Then we computed safe income on hand share by share before any dividend was declared, and sized the dividend so subsection 55(2) had nothing to recharacterise.
The result — A family-owned manufacturer planning succession, Halifax, Nova Scotia
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $117,000 of the penalty already assessed on the earlier year.
Case Study 4 · CRA review defended
$19,500 Reassessment Reduced To Nil On Review — Share Exchange Shareholder, Regina
Client: A shareholder exchanging common shares for preferred shares · Where: Regina, Saskatchewan · Engagement: 9 weeks, fixed fee
Reassessment reduced toNil
Tax protected$19,500
Prior filingsUndisturbed
The situation — A shareholder exchanging common shares for preferred shares, Regina, Saskatchewan
A review notice arrived at a shareholder exchanging common shares for preferred shares in Regina, Saskatchewan, covering corporate amalgamation for two tax years. The auditor's working position was an adjustment of $19,500. It was driven by a dividend paid up to the holding company with no safe income on hand computed behind it.
What we did for A shareholder exchanging common shares for preferred shares, Regina, Saskatchewan
Rather than negotiate, we rebuilt the record. We filed the section 85 election on form T2057 with the elected amounts set at the cost amounts of the transferred property. We kept the non-share consideration inside those amounts, so nothing was realised on the transfer. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A shareholder exchanging common shares for preferred shares, Regina, Saskatchewan
The auditor accepted the documented position and closed the review without adjustment, protecting $19,500 and leaving the prior filings undisturbed.
Case Study 5 · Objection and relief
Desk-Review Assessment Of $34,000 Vacated — Redundant Subsidiary, Moncton
Client: A redundant subsidiary corporation · Where: Moncton, New Brunswick · Engagement: 6 weeks, fixed fee
Assessment vacated$34,000
Supporting recordsNow on file
AccountCleared
The situation — A redundant subsidiary corporation, Moncton, New Brunswick
A redundant subsidiary corporation in Moncton, New Brunswick was carrying $34,000 of penalties and interest. The charges arose from an inter-company balance and a shareholder loan left outstanding between the corporations being merged. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A redundant subsidiary corporation, Moncton, New Brunswick
We reviewed the paid-up capital of each class, the capital dividend account and the eligible dividend designations before the final distribution. We dissolved the corporation and requested the clearance certificate. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A redundant subsidiary corporation, Moncton, New Brunswick
The assessment was vacated. $34,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 6 · Scaling without breaking
Scaled To 78 Staff With $53,000 Of Working Capital Freed — Two-Subsidiary Holding Company, Toronto
Client: A two-subsidiary holding company · Where: Toronto, Ontario · Engagement: 10 weeks, fixed fee
Headcount reached78
Working capital freed$53,000
Missed deadlinesZero
The situation — A two-subsidiary holding company, Toronto, Ontario
A two-subsidiary holding company in Toronto, Ontario was growing fast, with headcount reaching 78 in eighteen months. The back office had not kept up. A trust still holding capital property with its twenty-one-year deemed disposition inside the planning horizon was the first thing to break.
What we did for A two-subsidiary holding company, Toronto, Ontario
We filed the short-year T2 for each predecessor corporation and chose the first year-end of the amalgamated corporation deliberately. We carried the predecessor loss balances forward under the continuity rules. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A two-subsidiary holding company, Toronto, Ontario
The business reached 78 staff with no missed remittance and no late filing. $53,000 of working capital was freed in the process.
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.
