My daughter won a car worth $40,000 and had to put her name on the title. She turned around and sold it for $32,000. Is the Fair Market Value $40,000 or $32,000?

[AlanT · Accepted solution]

The Fair Market Value of the automobile is $32,000.

Fair market value is defined as "the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts." 

To determine your property's fair market value, in your situation, is the price the willing buyer paid for the automobile.