Fair Market Value

Also found in: Dictionary, Medical, Financial, Acronyms, Encyclopedia, Wikipedia.

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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
"The Quezon City Council had recently been informed that property owners in the city received letters from the City Assessor's Office saying that adjustments in the fair market values will take into effect in January 2019.
Petitioner also contends the Virginia Constitution mandates only that assessments be at fair market value. However, Article X 2 of the Virginia Constitution states "all assessments of real estate and tangible personal property shall be at their fair market value, to be ascertained as prescribed by law." This phrase does not limit the General Assembly from enacting legislation surrounding the appeal by a taxpayer of a county's assessment.
Honda argues that, under the facts presented here, 'fair market value' is no different than the auction price and, thus, its notices, which parrot the so-called safe-harbor language in Mass.
Based on this self-diagnostic test, 'OBV for mobile' provides a fair market value of the smartphone.
In the second year and later years, the commission could be up to 35 percent of the fair market value limit in effect during that calendar year.
This article is intended to broaden your perspective on the fair market value standard of valuation.
In determining fair market value, discounts are allowed for minority interests and lack of marketability.
It then requires that the adjusted basis of the property be allocated between the portions contributed and sold, based on their relative proportions of the property's fair market value. (1) Gain is recognized on the sale portion to the extent the amount realized exceeds the allocated basis; however, no loss is recognized if the sale amount is less than the allocated basis of the sold portion.
The gift tax method included in the proposed regulations assumes that the tax-payer can use sales of comparable annuities to determine the fair market value of the annuity being converted.
The sons then amended the trust income tax returns for 1990, 1991 and 1992 to reflect the Art Advisory Panel's fair market value of $36,636,630, which increased the cost of goods sold and reduced the gain on their sale.
The "step up" in basis allows the estate holding a decedent's assets, including real property, to value the assets at their fair market value as of the date of the decedent's death.