Words and Phrases - "fair market value"

On a non-arm's length transfer of capital property by a non-resident in favour of a resident Canadian, whether by donation or disposition, what value should be used in any adjustment to the property's deemed cost? CRA responded (TaxInterpretations translation):

[I]f a non-resident disposes or makes a gift of taxable Canadian property in favour of a person with whom it does not deal at arm's length, the disposition is deemed to be made at FMV in accordance with section 116. On the other hand, in the transfer pricing context, when the conditions for the application of subsection 247(2) are satisfied, the arm's length transfer price is used. … As for FMV, it generally represents the highest price obtainable for a property on a sale in a free and open market between two willing, informed and prudent persons acting independently. In a transfer pricing context where these values are different, subsection 247(8) confirms…that if the transfer price is adjusted pursuant to the application of subsection 247(2), subsections 69(1) and (1.2) are not applicable. Thus, the arm's length transfer price generally would be used… .