6 worked US Form 1040-NR 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 us form 1040-nr filing work, not a specific client's file.
Case Study 1 · Sale and succession
$215,000 Sheltered By The Lifetime Capital Gains Exemption — US-Facing Canadian Corporation, Surrey
Client: A Canadian corporation with US customers · Where: Surrey, British Columbia · Engagement: 8 weeks, fixed fee
Gain sheltered$215,000
ClosingOn schedule
Share qualificationMet
The situation — A Canadian corporation with US customers, Surrey, British Columbia
A Canadian corporation with US customers in Surrey, British Columbia had an offer on the table and 30 months to close. The shares did not qualify for the capital gains exemption. No valuation on file to support the price the parties had agreed was part of the reason.
What we did for A Canadian corporation with US customers, Surrey, British Columbia
We purified the corporation so the shares met the qualifying tests. We reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked. All of it was done well ahead of the closing date.
The result — A Canadian corporation with US customers, Surrey, British Columbia
The sale closed on schedule with $215,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 2 · Backlog brought current
Collections Halted And $133,000 Cut From A 4-Year Backlog — Canadian on US Payroll, Winnipeg
Client: A Canadian with a US employer · Where: Winnipeg, Manitoba · Engagement: 10 weeks, fixed fee
Balance reduced by$133,000
Backlog cleared4 years
CollectionsHalted
The situation — A Canadian with a US employer, Winnipeg, Manitoba
By the time a Canadian with a US employer in Winnipeg, Manitoba called, 4 years were outstanding. The CRA had assessed on estimates. Underneath it sat winters spent in the United States with the day count kept casually and no residency position documented anywhere.
What we did for A Canadian with a US employer, Winnipeg, Manitoba
We reconstructed the records year by year. We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward. Each filing replaced an arbitrary assessment with a real one.
The result — A Canadian with a US employer, Winnipeg, Manitoba
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $133,000, and a relief application addressed part of the accumulated interest.
Case Study 3 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $63,000 Saved Each Year — Florida Property Owner, Edmonton
Client: A family with a Florida vacation property · Where: Edmonton, Alberta · Engagement: 11 weeks, fixed fee
Annual saving$63,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A family with a Florida vacation property, Edmonton, Alberta
A family with a Florida vacation property in Edmonton, Alberta had outgrown the structure it started with. Foreign accounts that had passed the $100,000 T1135 threshold three years earlier was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A family with a Florida vacation property, Edmonton, Alberta
We mapped the current structure and modelled the target. Then 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. The tax-deferred elections were filed on time and the supporting valuations documented.
The result — A family with a Florida vacation property, Edmonton, Alberta
The reorganisation completed without triggering tax, and the new structure saves approximately $63,000 a year while removing the exposure the old one carried.
Case Study 4 · Objection and relief
Desk-Review Assessment Of $91,000 Vacated — Arizona Snowbird, Vancouver
Client: A snowbird spending winters in Arizona · Where: Vancouver, British Columbia · Engagement: 3 weeks, fixed fee
Assessment vacated$91,000
Supporting recordsNow on file
AccountCleared
The situation — A snowbird spending winters in Arizona, Vancouver, British Columbia
A snowbird spending winters in Arizona in Vancouver, British Columbia was carrying $91,000 of penalties and interest. The charges arose from a US LLC taxed as a corporation in Canada, producing double tax on the same income. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A snowbird spending winters in Arizona, Vancouver, British Columbia
We aligned the Canadian and US reporting of the same income so the foreign tax credit claim carried support on both returns. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A snowbird spending winters in Arizona, Vancouver, British Columbia
The assessment was vacated. $91,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 5 · Deadline rescue
Filed On Time From A Standing Start, $40,000 Penalty Avoided — Inbound Assignee, Toronto
Client: An inbound transferee on assignment · Where: Toronto, Ontario · Engagement: 7 weeks, fixed fee
Penalty avoided$40,000
Turnaround7 weeks
FiledOn time
The situation — An inbound transferee on assignment, Toronto, Ontario
An inbound transferee on assignment in Toronto, Ontario came to us 7 weeks before its filing deadline. The file came with 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net. A late filing would have triggered a penalty of roughly $40,000 before interest.
What we did for An inbound transferee on assignment, Toronto, Ontario
We worked backwards from the deadline. We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund. We prioritised the items that actually gated the filing and deferred everything that did not.
The result — An inbound transferee on assignment, Toronto, Ontario
The return was filed on time and complete. The $40,000 penalty never arose, and the compliance calendar we set means the next deadline is scheduled rather than discovered.
Case Study 6 · Records and systems rebuilt
33 Months Reconciled And $7,700 Of Input Tax Recovered — US Pension Recipient, Guelph
Client: A Canadian resident receiving US pension income · Where: Guelph, Ontario · Engagement: 10 weeks, fixed fee
Months reconciled33
Input tax recovered$7,700
Close time5 days
The situation — A Canadian resident receiving US pension income, Guelph, Ontario
Nothing reconciled at a Canadian resident receiving US pension income in Guelph, Ontario. Every filing started with 33 months of cleanup. The file was carrying a departure year filed as a normal resident return with no deemed disposition reported.
What we did for A Canadian resident receiving US pension income, Guelph, Ontario
We rebuilt from source rather than correcting on top of the existing file. We applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it. Then we set the routine that keeps it clean.
The result — A Canadian resident receiving US pension income, Guelph, Ontario
33 months reconciled to the bank. The close now takes 5 days, and $7,700 of previously unclaimable input tax was recovered in the process.
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.
