Corporate Tax Installment Calculation Case Studies
6 worked Corporate Tax Installment Calculation 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 tax installment calculation work, not a specific client's file.
Case Study 1 · Sale and succession
$310,000 Sheltered By The Lifetime Capital Gains Exemption — Incorporated Consultancy, London
The situation — An incorporated consultancy, London, Ontario
An incorporated consultancy in London, Ontario had an offer on the table and 23 months to close. The shares did not qualify for the capital gains exemption. A single shareholder holding every share, with no room to multiply the exemption was part of the reason.
What we did for An incorporated consultancy, London, Ontario
We purified the corporation so the shares met the qualifying tests. We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down. All of it was done well ahead of the closing date.
The result — An incorporated consultancy, London, Ontario
The sale closed on schedule with $310,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 2 · CRA review defended
$106,000 Proposed Adjustment Withdrawn In Full — Instalment-Paying Corporation, Calgary
Client: A corporation paying instalments on prior-year figures · Where: Calgary, Alberta · Engagement: 8 weeks, fixed fee
Adjustment withdrawn$106,000
File closed in8 weeks
Penalties assessedNone
The situation — A corporation paying instalments on prior-year figures, Calgary, Alberta
A corporation paying instalments on prior-year figures in Calgary, Alberta received a proposal letter opening a review of corporate tax installment calculation. The CRA had identified a loss year carried forward by default when carrying it back would have produced a refund cheque. It proposed an adjustment of $106,000, with 30 days to respond.
What we did for A corporation paying instalments on prior-year figures, Calgary, Alberta
We treated the response as an evidence exercise rather than an argument. 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. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A corporation paying instalments on prior-year figures, Calgary, Alberta
The proposed adjustment was withdrawn in full — all $106,000 of it. The file closed in 8 weeks with no change to the assessed amounts and no penalty.
Case Study 3 · Planning that cut the bill
$51,000 Cut From The Annual Tax Bill — Corporate Rental Portfolio, Kitchener
The situation — A corporately-owned rental portfolio, Kitchener, Ontario
A corporately-owned rental portfolio in Kitchener, Ontario 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 corporately-owned rental portfolio, Kitchener, Ontario
We modelled the current position against the alternatives before changing anything. Then we reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company.
The result — A corporately-owned rental portfolio, Kitchener, Ontario
The change saved $51,000 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
26 Months Reconciled And $17,500 Of Input Tax Recovered — Non-Calendar Year-End Corporation, Ottawa
Client: A corporation with a non-calendar fiscal year-end · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
Months reconciled26
Input tax recovered$17,500
Close time8 days
The situation — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
Nothing reconciled at a corporation with a non-calendar fiscal year-end in Ottawa, Ontario. Every filing started with 26 months of cleanup. The file was carrying a distribution treated as tax-free capital dividend with no election ever filed.
What we did for A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
We rebuilt from source rather than correcting on top of the existing file. We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. Then we set the routine that keeps it clean.
The result — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
26 months reconciled to the bank. The close now takes 8 days, and $17,500 of previously unclaimable input tax was recovered in the process.
Case Study 5 · Objection and relief
$60,000 Of Penalties And Interest Cancelled On Relief — First-Profit Technology CCPC, Moncton
Client: A technology CCPC approaching its first profitable year · Where: Moncton, New Brunswick · Engagement: 3 weeks, fixed fee
Penalties and interest cancelled$60,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A technology CCPC approaching its first profitable year, Moncton, New Brunswick
An assessment of $60,000 landed at a technology CCPC approaching its first profitable year in Moncton, New Brunswick following a desk review. It turned on two corporations under common control filing as if each had its own $500,000 limit. The auditor had not seen the records behind it.
What we did for A technology CCPC approaching its first profitable year, Moncton, New Brunswick
We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A technology CCPC approaching its first profitable year, Moncton, New Brunswick
$60,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 6 · Backlog brought current
Collections Halted And $27,000 Cut From A 4-Year Backlog — Two-Shareholder CCPC, Halifax
Client: A CCPC with two shareholders · Where: Halifax, Nova Scotia · Engagement: 3 weeks, fixed fee
Balance reduced by$27,000
Backlog cleared4 years
CollectionsHalted
The situation — A CCPC with two shareholders, Halifax, Nova Scotia
By the time a CCPC with two shareholders in Halifax, Nova Scotia called, 4 years were outstanding. The CRA had assessed on estimates. Underneath it sat dividends moved up to a holding company year after year with no safe-income support on file.
What we did for A CCPC with two shareholders, Halifax, Nova Scotia
We reconstructed the records year by year. We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. Each filing replaced an arbitrary assessment with a real one.
The result — A CCPC with two shareholders, Halifax, Nova Scotia
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $27,000, 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.
