Fair Market Value
What is Fair Market Value?
Fair market value is the price at which a willing seller sells a good or service to a willing buyer.
Example of Fair Market Value
Let's assume John Doe wants to sell his house. He lists it for $750,000. Jane Dale wants to buy a house. She sees John's house for sale and offers him $675,000. The two negotiate the price and agree on $700,000. Because it is the price John and Jane agree to, the fair market value of the house is $700,000.
Why does Fair Market Value matter?
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