Purchase or Sale of Business Tax Planning Case Studies
6 worked Purchase or Sale of Business 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 purchase or sale of business tax planning work, not a specific client's file.
Case Study 1 · CRA review defended
Audit Defence Closed In 7 Weeks, $136,000 Cleared — Professional Corporation, Guelph
Client: A professional corporation · Where: Guelph, Ontario · Engagement: 7 weeks, fixed fee
Proposed tax cleared$136,000
Review duration7 weeks
OutcomeNo change
The situation — A professional corporation, Guelph, Ontario
A professional corporation in Guelph, Ontario was selected for review. Retained earnings building in the operating company with no plan for extracting them had shown up in the CRA's automated matching. The proposed adjustment on purchase or sale of business tax planning came to $136,000.
What we did for A professional corporation, Guelph, Ontario
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A professional corporation, Guelph, Ontario
The review closed with no change. $136,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Case Study 2 · Sale and succession
Share Sale Restructured, $320,000 Less Tax On Closing — Incorporated Consultancy, Saskatoon
The situation — An incorporated consultancy, Saskatoon, Saskatchewan
An incorporated consultancy in Saskatoon, Saskatchewan was preparing to sell. Due diligence surfaced a single shareholder holding every share, with no room to multiply the exemption. That would have reduced the price or killed the deal outright.
What we did for An incorporated consultancy, Saskatoon, Saskatchewan
We cleaned up the historical file. 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. Then we prepared the due-diligence package the buyer's advisers actually asked for.
The result — An incorporated consultancy, Saskatoon, Saskatchewan
The deal closed at the agreed price. $320,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Case Study 3 · Structure rebuilt
Corporate Structure Rebuilt For $43,000 Of Annual Savings — Incorporated Trades Business, Lethbridge
Client: An incorporated trades business · Where: Lethbridge, Alberta · Engagement: 5 weeks, fixed fee
Saving per year$43,000
DocumentationComplete
Transfer basisRollover
The situation — An incorporated trades business, Lethbridge, Alberta
The structure at an incorporated trades business in Lethbridge, Alberta dated from years earlier. It had been set up for a business that no longer existed. A distribution treated as tax-free capital dividend with no election ever filed had become expensive.
What we did for An incorporated trades business, Lethbridge, Alberta
We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result — An incorporated trades business, Lethbridge, Alberta
$43,000 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
Case Study 4 · Deadline rescue
$103,000 Late-Filing Penalty Cancelled On Relief Application — Corporation Holding Investments, London
Client: An operating company holding surplus investments · Where: London, Ontario · Engagement: 4 weeks, fixed fee
Penalty cancelled$103,000
Relief applicationGranted
ReturnAccepted as filed
The situation — An operating company holding surplus investments, London, Ontario
An operating company holding surplus investments in London, Ontario had already missed one deadline and was about to miss a second. Behind it sat dividends moved up to a holding company year after year with no safe-income support on file. A penalty of $103,000 was accruing.
What we did for An operating company holding surplus investments, London, Ontario
We split the work into what had to happen before the deadline and what could follow it. 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 — An operating company holding surplus investments, London, Ontario
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $103,000 of the penalty already assessed on the earlier year.
Case Study 5 · Cash and remittance control
Remittance Schedule Corrected, $94,000 Refunded — Two-Shareholder CCPC, Toronto
Client: A CCPC with two shareholders · Where: Toronto, Ontario · Engagement: 11 weeks, fixed fee
Overpayment refunded$94,000
Late remittances sinceZero
ScheduleAutomated
The situation — A CCPC with two shareholders, Toronto, Ontario
Remittances at a CCPC with two shareholders in Toronto, Ontario were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat a small business limit quietly shared across three associated corporations nobody had mapped.
What we did for A CCPC with two shareholders, Toronto, 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. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — A CCPC with two shareholders, Toronto, Ontario
Penalties stopped from the following remittance onwards, and $94,000 of overpaid instalments was refunded.
Case Study 6 · Scaling without breaking
Growth Handled Without A Missed Filing, $84,000 Freed — Second-Generation Manufacturer, Burnaby
Client: A second-generation family manufacturer · Where: Burnaby, British Columbia · Engagement: 7 weeks, fixed fee
Cash freed$84,000
Compliance failuresNone
ReportingMonthly
The situation — A second-generation family manufacturer, Burnaby, British Columbia
A second-generation family manufacturer in Burnaby, British Columbia was opening in a second province. That meant different filing obligations and a different payroll regime. Passive investment income that had crossed the $50,000 grind threshold unnoticed already sat in the file.
What we did for A second-generation family manufacturer, Burnaby, British Columbia
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 put monthly reporting in place. That let the owner see the cash effect of growth while there was still time to act on it.
The result — A second-generation family manufacturer, Burnaby, British Columbia
Growth was absorbed without a compliance failure. $84,000 of cash was released, and the monthly reporting now flags a problem while it is still small.
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.
