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
It is vital because "What is fair market value for tax purposes?" is not a mechanical calculation. It is a real-world judgment about risk, control, sustainability, and transferability — and that judgment is where 10–15 years of owner-operator and valuation experience, your gut–brain axis, does the heavy lifting.
Why It Is Not Mechanical
On paper, valuation appears formula-driven. In reality, governance rights, risk concentration, growth durability, market conditions, and stakeholder dynamics materially affect value.
Where Experience Changes the Number
Decisions around normalization, premiums, discounts, projections, and defensibility require judgment formed through lived ownership, negotiation, and financial accountability.
Why the Gut–Brain Axis Matters
The brain performs disciplined financial analysis. The gut recognizes unrealistic narratives, hidden leverage, emotional distortions, and deal risk. Together they produce conclusions that withstand scrutiny.
Protecting Financial Lives
The final number affects wealth, control, solvency, tax exposure, and long-term relationships. Requiring 10–15 years of serious hands-on business and valuation experience ensures the answer is fair, defensible, and durable. See my Experience page.
The Result
You receive a fair market value conclusion that is clear, defensible, and aligned with CRA's practical expectations.