QSBC / LCGE Asset-Test Calculator
Test whether a corporation’s shares meet the asset conditions for qualified small business corporation status, then turn the result into a client-ready letter, not just a number on screen.
The calculation is only half the work. CodaraFlow finishes the explanation, the tables, and the client-ready letter.
Whether the Shares Meet the Asset Tests
This is one of the built-in calculations in CodaraFlow. Enter the corporation’s assets and liabilities at fair market value, and it measures the active-business proportion against the tests for qualified small business corporation share status.
- The Sale-Time TestAt the sale, whether all or substantially all of the corporation’s asset value is used in an active business.
- The 24-Month TestWhether the period-end figures entered meet the more-than-50% active-asset test that must be satisfied throughout the 24 months before the sale.
- Goodwill on the Active SideBusiness goodwill arising from the active business, included as an active-business asset where appropriate.
- The Working-Capital Cash RuleCash reasonably required for the active business may be treated as an active-business asset.
- Purification SignalWhen the sale-time test is close or not met, a flag that purification planning may be considered before the shares qualify.
From the Calculation to a Client-Ready Letter
The number is not the deliverable. In CodaraFlow the result drops straight into a letter section: the firm’s approved wording, the test tables, and the statutory notes that actually apply to this client, written in for you. Exported as an editable Word document on your letterhead.
The same reviewed explanation, not whatever the preparer types today.
The pass, close, purification, working-capital and holding-period notes appear only when the figures trigger them.
The sale-time and period-end tests are laid out and footed automatically.
Finish it in Word, on your firm’s letterhead. No proprietary format.
Grounded in the Provisions You Cite
The tests are based on the definitions of qualified small business corporation share and small business corporation in the Income Tax Act. The wording is firm-editable; the sections are fixed by the Act.
A share qualifies only where the corporation meets the asset, holding-period and ownership conditions.
At the sale, all or substantially all of the fair market value of the corporation’s assets is used in an active business carried on primarily in Canada.
Throughout the 24 months before the sale, the shares are not owned by an unrelated person and more than 50% of the fair market value of the corporation’s assets is used in an active business.
It evaluates the corporation’s asset conditions for QSBC share status. It does not confirm the amount of exemption available to the vendor, or address safe-income or anti-avoidance analysis. Confirm the figures before relying on them.
Calculations Firms Reach For Alongside It
Get a working demo account, run this calculation on a real file, and export the letter it produces.
Everything is computed from the figures you enter and assembled from your firm’s approved wording. The app never connects to AI.
Editable Word documents on your firm’s letterhead. Monthly pricing, no long-term contracts.
Questions About This Calculation
Is this a standalone calculator?
No. It’s one of the built-in calculations inside CodaraFlow. The result becomes a client-ready letter section, complete with the test tables and the notes that apply, not just a figure you copy into a client letter.
Does it confirm the client can claim the exemption?
No. It evaluates the corporation’s asset conditions for QSBC share status. Other statutory conditions, including the holding-period and ownership requirements, and any anti-avoidance considerations, must still be reviewed.
Can we change the wording and which notes appear?
Yes. Every sentence and every note is firm-editable, and can be overridden on an individual letter.
Does any client data go to an AI?
No. The app never connects to AI. Deliverables are assembled from structured facts and your firm’s approved wording.