6 worked Investment Corporation Tax Return 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 investment corporation tax return work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$78,000 In Credits Claimed That Prior Filings Had Missed — Second-Generation Manufacturer, Calgary
Client: A second-generation family manufacturer · Where: Calgary, Alberta · Engagement: 8 weeks, fixed fee
Credits claimed$78,000
Years adjusted3
Review outcomeNo adjustment
The situation — A second-generation family manufacturer, Calgary, Alberta
A second-generation family manufacturer in Calgary, Alberta had been filing for 3 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat two corporations under common control filing as if each had its own $500,000 limit.
What we did for A second-generation family manufacturer, Calgary, Alberta
We tested each activity against the eligibility criteria rather than the description on the invoice. Then 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.
The result — A second-generation family manufacturer, Calgary, Alberta
$78,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · CRA review defended
$27,000 Proposed Adjustment Withdrawn In Full — Import and Distribution Corporation, Barrie
Client: An import and distribution corporation · Where: Barrie, Ontario · Engagement: 10 weeks, fixed fee
Adjustment withdrawn$27,000
File closed in10 weeks
Penalties assessedNone
The situation — An import and distribution corporation, Barrie, Ontario
An import and distribution corporation in Barrie, Ontario received a proposal letter opening a review of investment corporation tax return. The CRA had identified passive investment income that had crossed the $50,000 grind threshold unnoticed. It proposed an adjustment of $27,000, with 30 days to respond.
What we did for An import and distribution corporation, Barrie, Ontario
We treated the response as an evidence exercise rather than an argument. We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. We then indexed every supporting document against the specific line the auditor had questioned.
The result — An import and distribution corporation, Barrie, Ontario
The proposed adjustment was withdrawn in full — all $27,000 of it. The file closed in 10 weeks with no change to the assessed amounts and no penalty.
Case Study 3 · Scaling without breaking
Second-Province Expansion Handled, $35,500 Of Cash Released — Holding and Operating Companies, Kitchener
Client: A holding company and its operating subsidiary · Where: Kitchener, Ontario · Engagement: 3 weeks, fixed fee
Cash released$35,500
New registrationsComplete on day one
Compliance gapsNone
The situation — A holding company and its operating subsidiary, Kitchener, Ontario
Revenue at a holding company and its operating subsidiary in Kitchener, Ontario was up sharply and cash was tighter than ever. Underneath it sat two corporations under common control filing as if each had its own $500,000 limit.
What we did for A holding company and its operating subsidiary, Kitchener, Ontario
We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A holding company and its operating subsidiary, Kitchener, Ontario
$35,500 of cash was released from the working capital cycle. The expansion completed with every registration and filing obligation covered from day one.
Case Study 4 · Planning that cut the bill
Remuneration Review Saved $51,000 Across Corporate And Personal Returns — First-Profit Technology CCPC, Saskatoon
Client: A technology CCPC approaching its first profitable year · Where: Saskatoon, Saskatchewan · Engagement: 3 weeks, fixed fee
Combined saving$51,000
ScopeCorporate + personal
Future yearsNo rework needed
The situation — A technology CCPC approaching its first profitable year, Saskatoon, Saskatchewan
Nothing was wrong at a technology CCPC approaching its first profitable year in Saskatoon, Saskatchewan. The filings were on time and accurate. What they were not was planned. A loss year carried forward by default when carrying it back would have produced a refund cheque had never been reviewed.
What we did for A technology CCPC approaching its first profitable year, Saskatoon, Saskatchewan
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. We ran the numbers across both the corporate and personal returns, so the saving was real rather than deferred into someone else's hands.
The result — A technology CCPC approaching its first profitable year, Saskatoon, Saskatchewan
$51,000 came off the combined corporate and personal tax bill, and the structure holds for future years without further work.
Case Study 5 · Cash and remittance control
Instalments Rebased, $80,000 Of Cash Returned To The Business — Non-Calendar Year-End Corporation, Ottawa
Client: A corporation with a non-calendar fiscal year-end · Where: Ottawa, Ontario · Engagement: 10 weeks, fixed fee
Cash returned$80,000
Instalment basisCurrent year
ReviewedQuarterly
The situation — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
A corporation with a non-calendar fiscal year-end in Ottawa, Ontario was paying instalments calculated on a prior year. That year no longer reflected the business. A small business limit quietly shared across three associated corporations nobody had mapped was tying up $80,000 of cash.
What we did for A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, we moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down.
The result — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
$80,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 6 · Records and systems rebuilt
Month-End Close Cut From 11 Weeks To 8 Days — Incorporated Consultancy, Toronto
The situation — An incorporated consultancy, Toronto, Ontario
The accounting file at an incorporated consultancy in Toronto, Ontario had a weak foundation. It was built on a balance-due date the owner believed was the same as the filing date. The year-end had taken 11 weeks each of the last three years.
What we did for An incorporated consultancy, Toronto, Ontario
We reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company. We also moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — An incorporated consultancy, Toronto, Ontario
The file reconciles. Month-end closes in 8 days instead of 11 weeks, and the year-end is a review rather than a reconstruction.
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.
