The question I am getting is they need fair market value my Charles county tax says ASSESSMENT IS 170,000.00 IS THAT WHAT THEY MEAN

[tallyho9-]

WHERE WOULD I FIND FAIR MARKET VALUE? I AM LOOKING ON CHARLES COUNTY TAX BILL

[MichaelDC]

Fair market value (FMV) is, in its simplest expression, the price that a person reasonable interested in buying a given asset would pay to a person reasonably interested in selling it for the purchase of the asset or asset would fetch in the marketplace.

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.  

Here's some other way to determine FMV:

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.

[ccanarel]

I am confused by this, too. The tax bill and homeowner's insurance policy have a property value for only the home to be rebuilt. That is about $200,000 less than the price of our home with land and home.

*Turbo tax asked what was the fair market value of the home on the date debt was last secured?

*What was the home acquisition debt and grandfathered debt on the date the debt was last secured?

I entered the value from an appraisal that we had on our home at the time of purchase for the fair market value. IS THAT WRONG? OR    Is it supposed to be the value on the homeowner's insurance policy or tax bill? THAT IS A SIGNIFICANT PRICE DIFFERENCE. PLEASE CLARIFY.

Then I need to amend my tax return.

[TomD8]

@ccanarel - You entered the correct figure.  A market appraisal done at the time of sale gives you the FMV.  It is different than an insurance replacement appraisal (which doesn't include the value of the lot) or an appraisal for tax purposes.  This website has a good explanation:  

https://homeguides.sfgate.com/difference-assessed-value-fair-market-value-property-tax-statements-79...

[ccanarel]

Thank you for your answer back in June. I am researching this question due to being confused, again. Would you believe that I forgot that I posted that question? I put down the purchase price of our home, because I did not think about the appraisal. I put the appraisal price down in 2019. However, now for 2020... I submitted with the purchase price of our home because I could not remember what figure I entered in 2019. Already submitted the 2020 return. Two different figures entered each year. Is this a red flag?

Why is turbo tax asking this question? It seems unnecessary. Would people be receiving more money if their appraisal was higher versus their purchase price? If so, I will amend. 

[DawnC]

Are you entering your mortgage interest deduction?   It is only going to matter if your mortgage interest is limited.    In addition to itemizing, these conditions must be met for mortgage interest to be deductible:

• The loan is secured, which means the lender has some kind of guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
• The home with the secured loan must have sleeping, cooking, and toilet facilities.
• The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) in order to get the full deduction.
• You or someone on your tax return must have signed or co-signed the loan.
• If you rented out the home, you must have used the home more than 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.

No flags should be raised if your debt is under the amounts above.   Or are you referencing some other kind of deduction?   @ccanarel

[ccanarel]

Thank you for your response. I entered everything listed on all tax forms. When Turbo Tax has their checkpoints and the question of acquisition debt and FMV come up.... I get a little confused.

Acquisition debt- I entered the amount that was secured for our mortgage. That is accurate.

The FMV...It seems that last year I put the appraisal value that existed when we purchased our home in 2018. 

This year... I put a value that was a little lower than the appraisal but higher than our secured mortgage. I put the price that we paid for our home. That seems to be a mistake. I should have put the appraisal form 2018 to be consistent? Correct?

The FMV today... is much higher than when we had our home appraised. I am wondering why Turbo Tax asks this question. 

I am wondering if I need to amend my return since I entered two different figures last year and this one. 

[AmyC]

@ccanarel If your mortgage debt is not limited, the numbers don't matter. The numbers you put down go into a worksheet to determine what is allowed on your tax return. The IRS is not looking at the worksheets so they are not aware of your different answers. No need to amend unless it changes your deductible mortgage interest.

If your mortgage is below $750,000, it does not matter. The worksheet will calculate the full interest to put on your tax form.

[malena81]

just clarifying, as I am also confused on this question. So I am listing the appraised value of my home when I last refinanced, in 2006? Is that what they mean by when it was last secured?

[DawnC]

Most loans are secured by a piece of property.  This would be property you pledged as collateral when you took out the loan.  Your lender would have a lien on this property until the loan is paid in full, and if you defaulted on payments, they would take possession of it.    If the loan is secured by the property it's used to buy, build, or improve, you'll be able to deduct the interest.  The question is asked to ensure you can take the mortgage interest deduction.  

The last time the property was secured is usually when the original mortgage is taken out or when a refinance is done.   Your refinance value is probably the most recent you have available.

  It is okay to use that value if there has not been a significant change to the value since then. 

See the original post, points 4 and 6 from @MichaelDC

'''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.'''

If the value has not changed much since 2006, the amount on your tax bill (the most recently assessed value) is okay to use.     @malena81