6 worked Owner-Manager Tax Planning 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 owner-manager tax planning work, not a specific client's file.
Case Study 1 · Records and systems rebuilt
Books Rebuilt From Source, $14,500 In Unclaimed Input Tax Found — Corporation Holding Investments, Kitchener
Client: An operating company holding surplus investments · Where: Kitchener, Ontario · Engagement: 7 weeks, fixed fee
Unclaimed tax found$14,500
Records rebuilt27 months
ProcessDocumented
The situation — An operating company holding surplus investments, Kitchener, Ontario
An operating company holding surplus investments in Kitchener, Ontario could not answer basic questions about its own numbers. A loss year carried forward by default when carrying it back would have produced a refund cheque sat between the bank statements and the ledger.
What we did for An operating company holding surplus investments, Kitchener, 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 then documented the process so the work does not depend on any one person remembering how it was done.
The result — An operating company holding surplus investments, Kitchener, Ontario
Records rebuilt and reconciled, $14,500 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 2 · CRA review defended
$134,000 Reassessment Reduced To Nil On Review — Three-Location Franchisee, Brampton
Client: A franchise operator with three locations · Where: Brampton, Ontario · Engagement: 9 weeks, fixed fee
Reassessment reduced toNil
Tax protected$134,000
Prior filingsUndisturbed
The situation — A franchise operator with three locations, Brampton, Ontario
A review notice arrived at a franchise operator with three locations in Brampton, Ontario, covering owner-manager tax planning for two tax years. The auditor's working position was an adjustment of $134,000. It was driven by a small business limit quietly shared across three associated corporations nobody had mapped.
What we did for A franchise operator with three locations, Brampton, Ontario
Rather than negotiate, we rebuilt the record. We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A franchise operator with three locations, Brampton, Ontario
The auditor accepted the documented position and closed the review without adjustment, protecting $134,000 and leaving the prior filings undisturbed.
Case Study 3 · Structure rebuilt
Holding Structure Added, $73,000 Saved Annually — Instalment-Paying Corporation, London
Client: A corporation paying instalments on prior-year figures · Where: London, Ontario · Engagement: 6 weeks, fixed fee
Annual saving$73,000
ReorganisationTax-neutral
StructureMatches operations
The situation — A corporation paying instalments on prior-year figures, London, Ontario
The structure at a corporation paying instalments on prior-year figures in London, Ontario needed fixing. The file was carrying two corporations under common control filing as if each had its own $500,000 limit. Every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did for A corporation paying instalments on prior-year figures, London, Ontario
We worked with the client's lawyer. Together, 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 also prepared the elections, resolutions and valuations the structure needed to stand up.
The result — A corporation paying instalments on prior-year figures, London, Ontario
The structure now matches the business. Annual saving of $73,000, and the reorganisation itself was tax-neutral.
Client: An incorporated consultancy · Where: Halifax, Nova Scotia · Engagement: 6 weeks, fixed fee
Overpayment refunded$49,000
Late remittances sinceZero
ScheduleAutomated
The situation — An incorporated consultancy, Halifax, Nova Scotia
Remittances at an incorporated consultancy in Halifax, Nova Scotia were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat a distribution treated as tax-free capital dividend with no election ever filed.
What we did for An incorporated consultancy, Halifax, Nova Scotia
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — An incorporated consultancy, Halifax, Nova Scotia
Penalties stopped from the following remittance onwards, and $49,000 of overpaid instalments was refunded.
Case Study 5 · Missed incentive claimed
Incentive Review Recovered $50,000 Across 5 Open Years — Non-Calendar Year-End Corporation, Hamilton
Client: A corporation with a non-calendar fiscal year-end · Where: Hamilton, Ontario · Engagement: 8 weeks, fixed fee
Recovered$50,000
Open years claimed5
Ongoing trackingIn place
The situation — A corporation with a non-calendar fiscal year-end, Hamilton, Ontario
An incentive review at a corporation with a non-calendar fiscal year-end in Hamilton, Ontario started from a simple question: what has never been claimed? The answer ran to 5 years. It was driven by a loss year carried forward by default when carrying it back would have produced a refund cheque.
What we did for A corporation with a non-calendar fiscal year-end, Hamilton, Ontario
We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down. We documented eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — A corporation with a non-calendar fiscal year-end, Hamilton, Ontario
The credits produced $50,000 across the open years. The tracking now in place means the following year's claim is documented as the work happens rather than reconstructed afterwards.
Case Study 6 · Objection and relief
Desk-Review Assessment Of $46,000 Vacated — Corporate Rental Portfolio, Ottawa
The situation — A corporately-owned rental portfolio, Ottawa, Ontario
A corporately-owned rental portfolio in Ottawa, Ontario was carrying $46,000 of penalties and interest. The charges arose from retained earnings building in the operating company with no plan for extracting them. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A corporately-owned rental portfolio, Ottawa, Ontario
We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A corporately-owned rental portfolio, Ottawa, Ontario
The assessment was vacated. $46,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
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.
