Fair Market Value


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Fair Market Value

The amount for which real property or Personal Property would be sold in a voluntary transaction between a buyer and seller, neither of whom is under any obligation to buy or sell.

The customary test of fair market value in real estate transactions is the price that a buyer is willing, but is not under any duty, to pay for a particular property to an owner who is willing, but not obligated, to sell.

Various factors can have an effect on the fair market value of real estate, including the uses to which the property has been adapted and the demand for similar property.

Fair market value can also be referred to as fair cash value or fair value.

fair market value

n. the amount for which property would sell on the open market if put up for sale. This is distinguished from "replacement value," which is the cost of duplicating the property. Real estate appraisers will use "comparable" sales of similar property in the area to determine market value, adding or deducting amounts based on differences in quality and size of the property. (See: market value, appraiser)

References in periodicals archive ?
This definition is what I consider as "the first face of fair market value.
So you have to look at all those things in addition to fair market value and how much you're actually paying.
Paper gain of $65,176 at a fair market value of $9.
More specifically, to the extent the option is nonstatutory, the optionee is taxed on compensation income equal to the difference between the strike price and the fair market value at exercise.
By contrast, real estate that passes to your heirs outside a QPRT enjoys a step-up in basis; that is, any gain on its subsequent sale is based on its fair market value at the time of your death, not on what you paid for it.
The contract should also: (1) be in writing and signed by the parties, (2) specify the services to be provided, (3) be for a term of not less than one year, (4) not base compensation on volume or value of referrals or other business, (5) determine compensation in advance based on fair market value and in an arm's length transaction, and (6) not involve promotion or counseling of activities or business arrangements that violate state or federal law.
For example, assume that a shareholder organizes a corporation and contributes as its only asset a building with a basis of $50 and a fair market value of $100; the property is subject to a mortgage debt of $90.
The applicant or spouse must then show by clear and convincing evidence that he/she intended to obtain fair market value for the transfer but did not, or that the purpose of the transfer was not to qualify for Medicaid.
If the foundry had assumed a price lower than fair market value, it may have overpaid on the monthly rent.
Thornton suggests that the fair market value of the practice or services rendered must be considered in order to determine if the antikickback law has been violated.
Some of these newly enacted laws ensure property owners are fully compensated by changing the definitions of just compensation and fair market value.