The Intent:

You want to ensure that the value used for tax purposes will withstand CRA scrutiny and not trigger reassessments, penalties, or years of uncertainty.

How I solve it:

CRA relies on the legal definition of fair market value, which assumes informed, arm’s-length parties acting without compulsion. I apply the 25 Factors Affecting Business Valuation to explicitly identify, measure, and value tangible and intangible assets rather than hiding value in a goodwill plug.

Key factors include Factor #1: Purpose, Factor #4: Return on Investment, Factor #5: Liquidity, Factor #24: Risk, and Factor #25: Opportunity. The 5 Senses Inspection Report provides observable, real-world evidence that supports the economic substance of the valuation.

Experience:

CRA disputes are rarely about math. They are about credibility. After 10–15 years of dealing with real audits, reassessments, and negotiations, it becomes clear what CRA challenges and what they accept. This pattern recognition cannot be taught academically.

Experience allows the valuation to anticipate CRA questions before they are asked. See my “Experience” link.

The Result:

You receive a valuation that aligns with CRA expectations, significantly reducing audit and reassessment risk.

The Intent:

You are transferring shares between family members, partners, or holding companies and want to avoid unintended tax consequences or future disputes with CRA.

How I solve it:

I apply the 25 Factors to establish fair market value at the transfer date, focusing on Factor #5: Liquidity, Factor #21: Minority Interest, Factor #24: Risk, and Factor #25: Opportunity. This ensures the transfer reflects economic reality rather than nominal pricing.

The 5 Senses Inspection Report supports the valuation by confirming that operational conditions at the transfer date match the assumptions used.

Experience:

Experience teaches that CRA often challenges “paper transactions” that lack economic substance. Recognizing when a transaction appears artificial versus genuine requires having seen many examples over time.

This judgment protects clients from retroactive tax exposure. See my “Experience” link.

The Result:

You complete the share transfer with a defensible valuation that supports tax compliance and reduces future exposure.

The Intent:

You want a clear understanding of what CRA actually means by fair market value, not just a definition copied from legislation.

How I solve it:

I interpret fair market value through the 25 Factors Affecting Business Valuation, ensuring that all material drivers of value, especially intangibles, are identified and supported. Purpose, ROI, Liquidity, Risk, and Opportunity form the backbone of this analysis.

The 5 Senses Inspection Report ensures that claimed value is grounded in observable business reality rather than theoretical assumptions.

Experience:

After years of explaining valuations to auditors, lawyers, and judges, it becomes clear that fair market value is ultimately a question of plausibility. Experience teaches how to articulate value in a way that aligns with how decision-makers actually think.

This articulation is learned through practice, not templates. See my “Experience” link.

The Result:

You receive a fair market value conclusion that is clear, defensible, and aligned with CRA’s practical expectations.