CRA Turned $250K Profit Into $1.2M In Taxes

In 2017, a man flipped a house in Toronto and made a $250,000 profit. Six years later, CRA audited him and hit him with a $1.167 million tax bill.This isn't a clickbait headline. It's a real audit case — and it could happen to anyone.In this video, I break down exactly how a $250,000 profit turned into a $1.167 million tax nightmare, and what we did to fight it.In This Episode, We Cover:• How a $250,000 profit turned into a $1.167 million tax bill• When CRA treats you as a builder for HST purposes• The 90% renovation rule and why HST can apply to the full sale price• Why missing receipts can erase hundreds of thousands in deductions• The 90-day objection deadline and how CRA appeals really work• Using affidavits, expert reports, and case law to challenge reassessments• How this case was reduced by $770,000 on appeal• Lessons every real estate investor and flipper needs to knowRelated Resources:• CRA's 3 Biggest Audit Targets in 2026• Download the Real Estate Tax Checklist at theadvisorstable.comWork With Us:If you're a business owner or high-net-worth family planning a sale, succession, or estate strategy, visit cedargroup.ca to learn how we can help.You can also visit theadvisorstable.com for more tax resources and insights.Subscribe for weekly breakdowns of CRA audits, tax planning, and real client cases.Comment below if you want us to cover more audit stories or specific tax scenarios.Legal Disclaimer: This video is based on a real case, but names and some details have been changed to protect client confidentiality. This content is for educational purposes only and does not constitute legal or tax advice. Always consult with a qualified tax professional before making financial decisions.#CanadianTax #RealEstate #TaxAudit #CRA #HouseFlipping #TaxStrategy #EstatePlanning #BusinessOwnersTimestamps:00:00 – $250K Profit to $1.16M Tax Bill01:18 – The House Flip Story02:36 – CRA Audit After 6 Years03:11 – HST Builder Shock04:39 – CRA Recalculates the Profit05:55 – Interest and Penalties Add Up06:51 – Total Damage: $1.167M07:49 – Filing a CRA Objection09:50 – Proving the Loan and Costs11:51 – CRA Appeals Decision12:23 – Final Tax Bill13:38 – 3 Lessons You Must Know14:55 – CRA Audits in 2026 and Next Steps