6 worked Partnership Dissolution Tax Filing 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 partnership dissolution tax filing work, not a specific client's file.
Case Study 1 · Cash and remittance control
Instalments Rebased, $70,000 Of Cash Returned To The Business — Incorporating Proprietor, Winnipeg
Client: A proprietor preparing to incorporate · Where: Winnipeg, Manitoba · Engagement: 8 weeks, fixed fee
Cash returned$70,000
Instalment basisCurrent year
ReviewedQuarterly
The situation — A proprietor preparing to incorporate, Winnipeg, Manitoba
A proprietor preparing to incorporate in Winnipeg, Manitoba was paying instalments calculated on a prior year. That year no longer reflected the business. An incorporation completed without the section 85 election, triggering an unnecessary gain was tying up $70,000 of cash.
What we did for A proprietor preparing to incorporate, Winnipeg, Manitoba
We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, we reconciled each partner’s allocation, capital account and drawings, so what was reported for tax matched the agreement instead of the cash taken.
The result — A proprietor preparing to incorporate, Winnipeg, Manitoba
$70,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 2 · Backlog brought current
7 Years Filed, $140,000 Removed From The Assessed Balance — Retiring Partner, Victoria
Client: A retiring partner leaving a professional partnership · Where: Victoria, British Columbia · Engagement: 4 weeks, fixed fee
Years filed7
Assessed balance removed$140,000
CollectionsStopped
The situation — A retiring partner leaving a professional partnership, Victoria, British Columbia
A retiring partner leaving a professional partnership in Victoria, British Columbia had not filed for 7 years. The CRA had issued arbitrary assessments. The business was carrying a proprietor planning around a September year-end that the rules did not permit. That came on top of a growing interest balance.
What we did for A retiring partner leaving a professional partnership, Victoria, British Columbia
We started with the oldest year and worked forward so each year's closing balances fed the next. We filed the outstanding T5013 returns with full partner allocations and requested penalty relief on the basis of the first-time nature of the failure. We filed the years in sequence rather than all at once.
The result — A retiring partner leaving a professional partnership, Victoria, British Columbia
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $140,000 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 3 · Planning that cut the bill
$21,500 Saved By Correcting What Prior Filings Had Missed — Limited Partnership, Edmonton
Client: A limited partnership with passive investors · Where: Edmonton, Alberta · Engagement: 6 weeks, fixed fee
Saving identified$21,500
RecurringYes
Positions documentedAll
The situation — A limited partnership with passive investors, Edmonton, Alberta
A limited partnership with passive investors in Edmonton, Alberta asked for a second opinion on partnership dissolution tax filing. That followed three years of rising tax. The review found a partnership that crossed the T5013 threshold two years before anyone noticed.
What we did for A limited partnership with passive investors, Edmonton, Alberta
We built the comparison first: current structure against two alternatives. Then we kept the proprietorship on a December 31 fiscal period and moved the year-end question into the incorporation plan where it could actually be answered.
The result — A limited partnership with passive investors, Edmonton, Alberta
First-year saving of $21,500, with the same benefit recurring. Every position taken is documented and supported in the file.
Case Study 4 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $24,000 Saved Each Year — Family-Staffed Proprietorship, Kitchener
Client: A proprietor whose spouse works in the business · Where: Kitchener, Ontario · Engagement: 11 weeks, fixed fee
Annual saving$24,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A proprietor whose spouse works in the business, Kitchener, Ontario
A proprietor whose spouse works in the business in Kitchener, Ontario had outgrown the structure it started with. A profit split applied in practice that the written agreement did not support was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A proprietor whose spouse works in the business, Kitchener, Ontario
We mapped the current structure and modelled the target. Then we restructured the draw policy so no partner’s adjusted cost base went negative again, and reported the deemed gain correctly for the year it arose. The tax-deferred elections were filed on time and the supporting valuations documented.
The result — A proprietor whose spouse works in the business, Kitchener, Ontario
The reorganisation completed without triggering tax, and the new structure saves approximately $24,000 a year while removing the exposure the old one carried.
Case Study 5 · Scaling without breaking
Scaled To 35 Staff With $80,000 Of Working Capital Freed — Two-Partner Architecture Practice, Vancouver
Client: A two-partner architecture practice · Where: Vancouver, British Columbia · Engagement: 11 weeks, fixed fee
Headcount reached35
Working capital freed$80,000
Missed deadlinesZero
The situation — A two-partner architecture practice, Vancouver, British Columbia
A two-partner architecture practice in Vancouver, British Columbia was growing fast, with headcount reaching 35 in eighteen months. The back office had not kept up. A partner taxed on an allocation in a year they had drawn nothing at all was the first thing to break.
What we did for A two-partner architecture practice, Vancouver, British Columbia
We drafted the allocation, admission and withdrawal terms into a written agreement before the next partner was admitted. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A two-partner architecture practice, Vancouver, British Columbia
The business reached 35 staff with no missed remittance and no late filing. $80,000 of working capital was freed in the process.
Case Study 6 · Objection and relief
$71,000 Of Penalties And Interest Cancelled On Relief — Spousal Retail Partnership, Brampton
The situation — A husband-and-wife retail partnership, Brampton, Ontario
An assessment of $71,000 landed at a husband-and-wife retail partnership in Brampton, Ontario following a desk review. It turned on three partners operating on a handshake, with no written agreement covering allocations or a departure. The auditor had not seen the records behind it.
What we did for A husband-and-wife retail partnership, Brampton, Ontario
We rewrote the partnership allocation to match how the practice actually operated, effective for the following fiscal year. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A husband-and-wife retail partnership, Brampton, Ontario
$71,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
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.
