In the context of a general discussion as to complying with the Sommerer exception from S. 75(2) for sales of property (here, a rental property or common shares) at FMV, CRA stated:
As stated by the FCA in CIT Financial ...:
“The jurisprudence is clear that the determination of fair market value is a question of fact rather than a question of law. … There is ample authority for the proposition that a trial judge is entitled to arrive at his own opinion as to value.”
In Carr ... the TCC noted that the legal definition of "fair market value" adopted by Canadian courts was:
“...the highest price an asset might reasonably be expected to bring if sold by the owner in the normal method applicable to the asset in question in the ordinary course of business in a market not exposed to any undue stresses and composed of willing buyers and sellers dealing at arm's length and under no compulsion to buy or sell.
This judicial definition reflects the key elements of the definition of "fair market value" in Information Circular IC-89-3 (footnote 4).