6 worked T106 Preparation 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 t106 preparation work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$64,000 In Credits Claimed That Prior Filings Had Missed — Canadian on US Payroll, Mississauga
Client: A Canadian with a US employer · Where: Mississauga, Ontario · Engagement: 7 weeks, fixed fee
Credits claimed$64,000
Years adjusted4
Review outcomeNo adjustment
The situation — A Canadian with a US employer, Mississauga, Ontario
A Canadian with a US employer in Mississauga, Ontario had been filing for 4 years without ever claiming the incentives its activity qualified for. Behind that sat invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken.
What we did for A Canadian with a US employer, Mississauga, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice, then restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward.
The result — A Canadian with a US employer, Mississauga, Ontario
$64,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $58,000 Saved Each Year — US Retirement Account Holder, Brampton
Client: A dual citizen with a US retirement account · Where: Brampton, Ontario · Engagement: 8 weeks, fixed fee
Annual saving$58,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A dual citizen with a US retirement account, Brampton, Ontario
A dual citizen with a US retirement account in Brampton, Ontario had outgrown the structure it started with. Winters spent in the United States with the day count kept casually and no residency position documented anywhere was the immediate problem; the longer-term one was that the structure blocked the next step.
What we did for A dual citizen with a US retirement account, Brampton, Ontario
We mapped the current structure, modelled the target, and filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund — with the tax-deferred elections filed on time and the supporting valuations documented.
The result — A dual citizen with a US retirement account, Brampton, Ontario
The reorganisation completed without triggering tax, and the new structure saves approximately $58,000 a year while removing the exposure the old one carried.
Case Study 3 · Records and systems rebuilt
Month-End Close Cut From 8 Weeks To 5 Days — Arizona Snowbird, Lethbridge
Client: A snowbird spending winters in Arizona · Where: Lethbridge, Alberta · Engagement: 8 weeks, fixed fee
Close time before8 weeks
Close time after5 days
Year-endReview, not rebuild
The situation — A snowbird spending winters in Arizona, Lethbridge, Alberta
The accounting file at a snowbird spending winters in Arizona in Lethbridge, Alberta was built on invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken. The year-end had taken 8 weeks each of the last three years.
What we did for A snowbird spending winters in Arizona, Lethbridge, Alberta
We reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused and moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — A snowbird spending winters in Arizona, Lethbridge, Alberta
The file reconciles. Month-end closes in 5 days instead of 8 weeks, and the year-end is a review rather than a reconstruction.
Case Study 4 · Scaling without breaking
Scaled To 52 Staff With $144,000 Of Working Capital Freed — US Citizen in Canada, Halifax
Client: A US citizen living in Canada · Where: Halifax, Nova Scotia · Engagement: 5 weeks, fixed fee
Headcount reached52
Working capital freed$144,000
Missed deadlinesZero
The situation — A US citizen living in Canada, Halifax, Nova Scotia
A US citizen living in Canada in Halifax, Nova Scotia was growing fast — headcount to 52 in eighteen months — and the back office had not kept up. A departure year filed as a normal resident return with no deemed disposition reported was the first thing to break.
What we did for A US citizen living in Canada, Halifax, Nova Scotia
We registered the payer for a non-resident withholding account, remitted the Regulation 105 amounts due, and applied for waivers covering the rest of the contract, and built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A US citizen living in Canada, Halifax, Nova Scotia
The business reached 52 staff with no missed remittance and no late filing. $144,000 of working capital was freed in the process.
Case Study 5 · Cross-border exposure resolved
$110,000 Of Double Taxation Removed On Treaty Position — US Pension Recipient, Moncton
Client: A Canadian resident receiving US pension income · Where: Moncton, New Brunswick · Engagement: 8 weeks, fixed fee
Double tax removed$110,000
DisclosureBrought current
Penalty exposureEliminated
The situation — A Canadian resident receiving US pension income, Moncton, New Brunswick
A Canadian resident receiving US pension income in Moncton, New Brunswick had US-side activity that the Canadian filings had never addressed. 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net meant the same income was being taxed twice.
What we did for A Canadian resident receiving US pension income, Moncton, New Brunswick
We established the residency and source position first, then applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it so the Canadian and foreign filings finally told the same story.
The result — A Canadian resident receiving US pension income, Moncton, New Brunswick
$110,000 of double taxation was removed, the disclosure obligations were brought current, and the penalty exposure was eliminated through the voluntary route.
Case Study 6 · Sale and succession
Share Sale Restructured, $820,000 Less Tax On Closing — Cross-Border Contractor, Ottawa
Client: A contractor working on both sides of the border · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
Tax saved on closing$820,000
PriceAs agreed
Post-closing adjustmentsNone
The situation — A contractor working on both sides of the border, Ottawa, Ontario
A contractor working on both sides of the border in Ottawa, Ontario was preparing to sell. Due diligence surfaced a shareholder loan balance that would have been picked up as income on closing, which would have reduced the price or killed the deal outright.
What we did for A contractor working on both sides of the border, Ottawa, Ontario
We cleaned up the historical file, reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked, and prepared the due-diligence package the buyer's advisers actually asked for.
The result — A contractor working on both sides of the border, Ottawa, Ontario
The deal closed at the agreed price. $820,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. 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.
