Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.
To put it another way, fair market value doesn’t necessarily represent the exact value. Instead, it is somewhat hypothetical. It represents the estimated amount of money a buyer and seller would likely agree upon through negotiations and under normal conditions.
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