6 worked Rental Income 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 rental income tax return work, not a specific client's file.
Case Study 1 · CRA review defended
$141,000 Proposed Adjustment Withdrawn In Full — Recently Separated Taxpayer, London
The situation — A recently separated taxpayer, London, Ontario
A recently separated taxpayer in London, Ontario received a proposal letter opening a review of rental income tax return. The CRA had identified medical expenses claimed on a calendar-year basis when a shifted window was worth far more. It proposed an adjustment of $141,000, with 30 days to respond.
What we did for A recently separated taxpayer, London, Ontario
We treated the response as an evidence exercise rather than an argument. We reset the medical expense claim window, transferred credits between spouses, and applied the tuition and disability amounts to the return that used them. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A recently separated taxpayer, London, Ontario
The proposed adjustment was withdrawn in full — all $141,000 of it. The file closed in 11 weeks with no change to the assessed amounts and no penalty.
Case Study 2 · Missed incentive claimed
Incentive Review Recovered $103,000 Across 6 Open Years — Multi-Source Retiree, Hamilton
Client: A retiree drawing from three sources · Where: Hamilton, Ontario · Engagement: 9 weeks, fixed fee
Recovered$103,000
Open years claimed6
Ongoing trackingIn place
The situation — A retiree drawing from three sources, Hamilton, Ontario
An incentive review at a retiree drawing from three sources in Hamilton, Ontario started from a simple question: what has never been claimed? The answer ran to 6 years. It was driven by RRSP room accumulated over eight years and never used in a high-income year.
What we did for A retiree drawing from three sources, Hamilton, Ontario
We pooled the carried-forward donation receipts onto the higher-income spouse’s return so the whole claim sat above the low-rate first tier. We documented eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — A retiree drawing from three sources, Hamilton, Ontario
The credits produced $103,000 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 3 · Objection and relief
$99,000 Of Penalties And Interest Cancelled On Relief — First-Time Home Buyer, Mississauga
Client: A first-time home buyer · Where: Mississauga, Ontario · Engagement: 3 weeks, fixed fee
Penalties and interest cancelled$99,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A first-time home buyer, Mississauga, Ontario
An assessment of $99,000 landed at a first-time home buyer in Mississauga, Ontario following a desk review. It turned on a home sale never reported on the basis that the gain was exempt anyway. The auditor had not seen the records behind it.
What we did for A first-time home buyer, Mississauga, Ontario
We carried the capital loss back against gains reported in the prior three years and generated a refund rather than a carry-forward balance. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A first-time home buyer, Mississauga, Ontario
$99,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 4 · Deadline rescue
Filed On Time From A Standing Start, $106,000 Penalty Avoided — Employee with Foreign Accounts, Lethbridge
Client: An employee with foreign investment accounts · Where: Lethbridge, Alberta · Engagement: 5 weeks, fixed fee
Penalty avoided$106,000
Turnaround5 weeks
FiledOn time
The situation — An employee with foreign investment accounts, Lethbridge, Alberta
An employee with foreign investment accounts in Lethbridge, Alberta came to us 5 weeks before its filing deadline. The file came with employment expenses claimed with no signed T2200 from the employer to support them. A late filing would have triggered a penalty of roughly $106,000 before interest.
What we did for An employee with foreign investment accounts, Lethbridge, Alberta
We worked backwards from the deadline. We obtained the signed T2200 and rebuilt the employment-expense claim on the prescribed form with the supporting records attached to the file. We prioritised the items that actually gated the filing and deferred everything that did not.
The result — An employee with foreign investment accounts, Lethbridge, Alberta
The return was filed on time and complete. The $106,000 penalty never arose, and the compliance calendar we set means the next deadline is scheduled rather than discovered.
Case Study 5 · Records and systems rebuilt
27 Months Reconciled And $6,800 Of Input Tax Recovered — Gig-Economy Driver, Moncton
Client: A gig-economy driver · Where: Moncton, New Brunswick · Engagement: 5 weeks, fixed fee
Months reconciled27
Input tax recovered$6,800
Close time5 days
The situation — A gig-economy driver, Moncton, New Brunswick
Nothing reconciled at a gig-economy driver in Moncton, New Brunswick. Every filing started with 27 months of cleanup. The file was carrying a rental property reported without any capital cost allowance analysis.
What we did for A gig-economy driver, Moncton, New Brunswick
We rebuilt from source rather than correcting on top of the existing file. We filed the outstanding T1135 disclosures under the voluntary disclosure route before the CRA raised them. Then we set the routine that keeps it clean.
The result — A gig-economy driver, Moncton, New Brunswick
27 months reconciled to the bank. The close now takes 5 days, and $6,800 of previously unclaimable input tax was recovered in the process.
Case Study 6 · Backlog brought current
Collections Halted And $34,500 Cut From A 7-Year Backlog — First-Year Physician, Kitchener
Client: A physician in their first year of practice · Where: Kitchener, Ontario · Engagement: 7 weeks, fixed fee
Balance reduced by$34,500
Backlog cleared7 years
CollectionsHalted
The situation — A physician in their first year of practice, Kitchener, Ontario
By the time a physician in their first year of practice in Kitchener, Ontario called, 7 years were outstanding. The CRA had assessed on estimates. Underneath it sat foreign accounts that had crossed the T1135 threshold two years earlier.
What we did for A physician in their first year of practice, Kitchener, Ontario
We reconstructed the records year by year. We recalculated the instalments on the current year’s expected income rather than the prior year’s, which stopped the instalment interest from growing. Each filing replaced an arbitrary assessment with a real one.
The result — A physician in their first year of practice, Kitchener, Ontario
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $34,500, 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.
