You may have heard the term “fair market value” or “FMV” come up in tax discussions, but you may not be entirely sure what it means. Rest assured, the Taxation Solutions, Inc. team is committed to making tax issues as hassle-free as possible, and that includes explaining confusing tax jargon so you know what we’re talking about!
Fair market value is defined as the price that a piece of property would sell for, assuming that the buyer and seller are both willing participants in the transaction. Fair market value also assumes that both parties are informed of all of the facts regarding the property and that neither is being compelled to participate in the transaction. In layperson’s language, it’s more or less what an item is currently worth.
Fair market value is used in several different ways when it comes to your taxes, including:
- Determining charitable contribution deductions
- Assessing casualty losses
- Establishing your basis in assets received by gift or inheritance
If you have questions about fair market value as it relates to your tax return, give our professionals a call. Taxation Solutions, Inc. has more than 40 years of experience, and we are happy to help you better understand your tax situation. Contact us now!