Fair market value (FMV) is the price in terms of cash equivalents that property would be sold for between a willing and able buyer and seller. The transaction must be considered arm’s length, meaning that it was (i) not between related parties for a low ball amount and (ii) not a forceful transaction. Both parties must have entered into a reasonable transaction.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.