1.Check the price of similar items being sold on the market. This factor is especially true in the sale of real estate. Knowing the current going rate for similar items can provide a general picture of the overall desirability of the item.
2.Consult individuals with expertise in the field of the item. For example, if you're attempting to calculate the fair market value of an antique, ask an antiques dealer to appraise the product.
3.Average the values you've gathered for a general idea of a fair market value.
4.Check the property's most recent tax bill. It will list not only the tax owed on the property but also the property's current assessed value. The value listed is based on the most recent assessment of the property, which may have occurred five or more years ago. Assessments are based on fair market appraisals of the property. Since housing markets fluctuate, the assessed value listed might not truly reflect the value of the property, since its fair market value may have gone up or down since its last appraisal.
5.Determine your local county's property assessment rate. This will be listed on your tax bill.
6.Request a reassessment of the property from the county assessor's office, if the fair market value of your home has changed significantly since its last appraisal
Real estate professionals draw up a Comparative Market Analysis (CMA) to get a ballpark idea of what the market value of a home should be. That’s taken from a reading of the house market value in the area and seeing what other comparable homes sold for.
If a personal residence has decreased in value since the original purchase or basis adjustments, the FMV could be lower than the adjusted basis. Transforming personal use property (i.e., a personal residence) to income-producing property (i.e., a rental unit), "the fair market value on the date of such conversion, if less than the adjusted basis of the property at that time, is the basis for computing depreciation." Therefore, if a personal residence is converted to a rental unit when its FMV is below its adjusted basis, the FMV becomes the adjusted basis. All depreciation is calculated using the lower adjusted basis amount.
