reference
glossary.
25 terms
definition
Fair Market Value (FMV) is the estimated price that a property would sell for in an open market between a willing buyer and seller, both having reasonable knowledge of relevant facts. This value assumes neither party is under pressure to complete the transaction and both are acting in their own best interests. FMV is used for tax assessments, insurance coverage, and estate planning purposes.
examples
- —The tax assessor determined the home's fair market value at $350,000 for property tax calculations.
- —Estate planners used the fair market value of the inherited property to determine capital gains tax implications.
- —The insurance company required a fair market value appraisal to establish appropriate coverage limits for the commercial building.