General information only — not financial advice for your situation.
This is a learning tool. Always check CRA My Account records and talk to a qualified professional for your own numbers.
Plain English
What something would sell for on the open market between a willing buyer and seller. CRA uses this to figure out the value of assets for tax purposes.
Technical definition
Fair market value (FMV) is the highest price obtainable in an open, unrestricted market between informed, willing parties under no compulsion. CRA uses FMV to determine deemed disposition proceeds, contribution values for registered accounts, and the value of donated property. FMV is critical for calculating capital gains, TFSA contribution amounts, and estate tax on death.
Examples
- • You contribute shares with a FMV of $5,000 to your TFSA. That $5,000 counts against your contribution room, regardless of what you originally paid for the shares.
- • You transfer a rental property worth $400,000 FMV to your spouse — the deemed disposition at FMV triggers a capital gain on the difference from your original cost.
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About this site
Every number on this site is sourced from CRA publications, the Income Tax Act, or provincial fiscal releases. We show the math, cite the sources, and never tell you what to do with your money.