After responding to a question on the interrelationship between ss. 69 and 247 respecting a cross-border non-arm's length purchase by a Canadian resident of a capital property at a price less than its fair market value, CRA added the following general comment:
For the purposes of the transfer pricing penalty pursuant to subsection 247(3) and the calculation of the threshold for the application of the penalty, any transfer pricing capital setoff adjustment will reduce the total of transfer pricing capital or income adjustments only if it is determined that the taxpayer or partnership of which the taxpayer is a member has made serious efforts to determine arm's length transfer prices for this setoff adjustment. In the situation where the taxpayer has no other transfer pricing adjustment, a transfer pricing capital setoff adjustment would not be subject to the transfer pricing penalty under subsection 247(3).