Fair market value

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The fair market value of property is the price at which it would change hands between a willing and informed buyer and seller. The term is used throughout the Internal Revenue Code, as well as in bankruptcy laws, in many state laws, and by several regulatory bodies.^[1]

In litigation in many jurisdictions in the United States the fair market value is determined at a hearing. In certain jurisdictions, the courts are required to hold fair market hearings, even if the borrowers or the loans guarantors waived their rights to such a hearing in the loan documents.^[2]

FMV is often used for taxation purposes, determining the value of charitable donations, estate planning, and other financial transactions. The specific methods used to determine FMV may vary depending on the type of property or asset involved.^[3]

Fair market value is subjective and can fluctuate based on market conditions, supply and demand, location, and other factors.^{[citation needed]}