1031.Exchange INTELLIGENCE NETWORK
License territory Acquire
TAX & BASIS

Fair market value

Also called: FMV · market value

⌕ Search dictionary
PLAIN-ENGLISH DEFINITION

The price at which property would change hands between willing parties under ordinary market conditions, used in many tax calculations.

What it means in practice.

Fair market value is relevant to identification limits, exchange economics, gain calculations and allocation.

Why it matters.

The 200% and 95% identification rules depend on property values, so valuation is not merely a financing issue.

Additional notes.

Fair market value is relevant to identification limits, exchange economics, gain calculations and allocation.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/publications/p544irs.gov ↗irs.gov/irb/2020-30_IRB
CONNECTED LANGUAGE

Related definitions.

Deadlines & Identification200% ruleAn identification rule permitting any number of replacement properties when their total fair market value does not exceed 200% of the aggregate fair market value of the relinquished properties.Deadlines & Identification95% ruleA narrow rule that may preserve an identification when too many properties were identified, if enough of the identified value is actually received.Transaction & ClosingAppraisalAn opinion of property value prepared by a qualified appraiser under applicable standards.
KEEP LEARNING

Build the vocabulary before the transaction clock starts.

Explore the federal framework, exchange structures, replacement-property intelligence and professional roles connected to this term.

Open learning centerSearch another term