Fair Market Value

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Fair Market Value

About Fair Market Value:

Fair Market Value (FMV) is the price at which an item would be sold at retail by a willing seller to a willing buyer. The price a willing buyer would pay a willing seller in a transaction on the open market. For stocks and bonds, this generally is the mean value between the highest and lowest selling prices on the date of valuation. It is assumed that both buyer and seller are rational and have a reasonable knowledge of relevant facts. Former Tax Regulation (check if this Reg. is current here) §20.2031-l(b).

In other words, the price that a property would sell for in an open market assuming a willing buyer and seller would likely agree upon the price when acting freely, carefully, and with complete knowledge.

Description and Definition of Fair Market Value

The price at which a willing seller will sell, and a willing buyer will buy, in an arm's length transaction when neither is under compulsion to sell or buy and both have reasonable knowledge of the relevant facts. To establish fair market value it is common to compare other similar property sold near the same time as your property.

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