6 worked US Form 1120 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 1120 filing work, not a specific client's file.
Case Study 1 · Cash and remittance control
Instalments Rebased, $155,000 Of Cash Returned To The Business — Inbound Assignee, Guelph
Client: An inbound transferee on assignment · Where: Guelph, Ontario · Engagement: 11 weeks, fixed fee
Cash returned$155,000
Instalment basisCurrent year
ReviewedQuarterly
The situation — An inbound transferee on assignment, Guelph, Ontario
An inbound transferee on assignment in Guelph, Ontario was paying instalments calculated on a prior year. That year no longer reflected the business. US tax paid but no foreign tax credit claimed on the Canadian return was tying up $155,000 of cash.
What we did for An inbound transferee on assignment, Guelph, Ontario
We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, 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 result — An inbound transferee on assignment, Guelph, Ontario
$155,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 2 · Missed incentive claimed
Incentive Review Recovered $43,000 Across 7 Open Years — Mid-Year Emigrant, Winnipeg
Client: An emigrant who left Canada mid-year · Where: Winnipeg, Manitoba · Engagement: 8 weeks, fixed fee
Recovered$43,000
Open years claimed7
Ongoing trackingIn place
The situation — An emigrant who left Canada mid-year, Winnipeg, Manitoba
An incentive review at an emigrant who left Canada mid-year in Winnipeg, Manitoba started from a simple question: what has never been claimed? The answer ran to 7 years. It was driven by US tax paid but no foreign tax credit claimed on the Canadian return.
What we did for An emigrant who left Canada mid-year, Winnipeg, Manitoba
We reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked. We documented eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — An emigrant who left Canada mid-year, Winnipeg, Manitoba
The credits produced $43,000 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 · Sale and succession
$780,000 Sheltered By The Lifetime Capital Gains Exemption — Non-Resident Landlord, Regina
Client: A non-resident owning Canadian rental property · Where: Regina, Saskatchewan · Engagement: 10 weeks, fixed fee
Gain sheltered$780,000
ClosingOn schedule
Share qualificationMet
The situation — A non-resident owning Canadian rental property, Regina, Saskatchewan
A non-resident owning Canadian rental property in Regina, Saskatchewan had an offer on the table and 24 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 non-resident owning Canadian rental property, Regina, Saskatchewan
We purified the corporation so the shares met the qualifying tests. We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. All of it was done well ahead of the closing date.
The result — A non-resident owning Canadian rental property, Regina, Saskatchewan
The sale closed on schedule with $780,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 4 · Deadline rescue
$110,000 Late-Filing Penalty Cancelled On Relief Application — US-Facing Canadian Corporation, Lethbridge
Client: A Canadian corporation with US customers · Where: Lethbridge, Alberta · Engagement: 10 weeks, fixed fee
Penalty cancelled$110,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A Canadian corporation with US customers, Lethbridge, Alberta
A Canadian corporation with US customers in Lethbridge, Alberta had already missed one deadline and was about to miss a second. Behind it sat a US LLC taxed as a corporation in Canada, producing double tax on the same income. A penalty of $110,000 was accruing.
What we did for A Canadian corporation with US customers, Lethbridge, Alberta
We split the work into what had to happen before the deadline and what could follow it. Then we filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund.
The result — A Canadian corporation with US customers, Lethbridge, Alberta
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $110,000 of the penalty already assessed on the earlier year.
Case Study 5 · Scaling without breaking
Second-Province Expansion Handled, $47,000 Of Cash Released — US Rental Owner, Hamilton
Client: A Canadian resident with a US rental property · Where: Hamilton, Ontario · Engagement: 11 weeks, fixed fee
Cash released$47,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A Canadian resident with a US rental property, Hamilton, Ontario
Revenue at a Canadian resident with a US rental property in Hamilton, Ontario was up sharply and cash was tighter than ever. Underneath it sat foreign accounts that had passed the $100,000 T1135 threshold three years earlier.
What we did for A Canadian resident with a US rental property, Hamilton, Ontario
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. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A Canadian resident with a US rental property, Hamilton, Ontario
$47,000 of cash was released from the working capital cycle. The expansion completed with every registration and filing obligation covered from day one.
Client: A family with a Florida vacation property · Where: Kitchener, Ontario · Engagement: 9 weeks, fixed fee
Proposed tax cleared$41,000
Review duration9 weeks
OutcomeNo change
The situation — A family with a Florida vacation property, Kitchener, Ontario
A family with a Florida vacation property in Kitchener, Ontario was selected for review. Winters spent in the United States with the day count kept casually and no residency position documented anywhere had shown up in the CRA's automated matching. The proposed adjustment on US form 1120 filing came to $41,000.
What we did for A family with a Florida vacation property, Kitchener, Ontario
We aligned the Canadian and US reporting of the same income so the foreign tax credit claim carried support on both returns. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A family with a Florida vacation property, Kitchener, Ontario
The review closed with no change. $41,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
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.
