fair market value


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

Fair Market Value

A subjective estimate of what a willing buyer would pay a willing seller for a given asset, assuming both have a reasonable knowledge of the asset's worth. Fair market value is important in both law and accounting. In the former, it is often used in assessing damages as the result of a lawsuit. In the latter, determining the fair market value of an asset (e.g. after depreciation) is important to determining the amount of tax owed on it.

fair market value

The price at which a buyer and a seller willingly consummate a trade.

Fair market value.

Fair market value is the price you would have to pay to buy a particular asset or service on the open market.

The concept of fair market value assumes that both buyer and seller are reasonably well informed of market conditions. It also assumes that neither is under undue pressure to buy or sell, and that neither intends to defraud the other.

fair market value

The amount that a willing buyer would pay a willing seller for property after reasonable exposure to the marketplace.

Fair Market Value (FMV)

The amount at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts.
References in periodicals archive ?
The court found that Trustmark's comparable sales approach was not probative of fair market value because six of the ten properties were appraised using foreclosure sales as comparable sales.
Jointly approved by the AICPA, ASA, Canadian Institute of Chartered Business Valuators (CICBV), NACVA, and IBA, this Glossary of Business Valuation Terms provides some slight variations to the old definition of fair market value as set forth by Revenue Ruling 59-60.
Paper gain of $188,972 at a fair market value of $7.
To illustrate, assume that (a) in 1998, an optionee is granted an ISO to purchase stock at $5 per share; (b) in 2000, the optionee exercises when the stock's fair market value is $100; and (c) in 2005, the optionee sells the acquired stock when the fair market value is $145.
Citing Estate of Jung, 101 TC 412 (1993), the court stated,"[T]ax courts have drawn a distinction between subsequent events that affect fair market value as of the valuation date and later-occurring events that may be considered as evidence of fair market value as of the valuation date.
Because, warns trusts and estates attorney Bruce Wexler of New York law firm Loeb & Loeb LLP, you must outlive the trust to reap its tax benefits, if not, your home goes back into your estate, where it will be taxed on its then-current fair market value.
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.
To comply with IRS guidelines, appraisals of the equipment may be needed to arrive at fair market value.
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.