MV vs FMV

[ZZGAMAZZ]

The intended use is to determine market reaction so the estate trustee can determine an appropriate list price.

Consequently the gPar form is being used with FMV because it is a non-mortgage assignment.

However, the intended users obviously want to know Market Value.

So which of the two definitions do I apply?

 

[Terrel L. Shields]

o which of the two definitions do I apply?

FMV....

The IRS definition - the final value will be the same.

"The purpose of the appraisal is to estimate the fair market value as defined by the IRS §1.170S-1(c)(2) of the subject property, as defined in this report, on behalf of the referenced client as the intended user of this report. The intended use of the appraisal is to assist the client, as the intended user of this report, in evaluating the subject property."

if a gifting, then you have to add

I understand that my appraisal will be used in connection with a return or claim for refund. I also understand that if a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund results from my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U. S. C. section 330(c).

FMV defined

Fair Market Value :
IRS Regulation Section 1.170A-1(c)(2) defines Fair Market Value (FMV) as “the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”

 

[Mark K]

If the only purpose of the appraisal is to establish a value for disposition of the real estate by the trustee, use which ever definition the trustee wants. Chances are...they won't care and likely won't know the difference.

Do you expect to have different values based on the negligible difference between the two definitions? Pick one definition.

If its going to the IRS then some of Terrel's comments could be appropriate.

 

[Terrel L. Shields]

If its going to the IRS then some of Terrel's comments could be appropriate.

CPAs like the FMV definition I provided. Only in a gifting do you address the part I just went back and italicized

 

[Mark K]

CPAs like the FMV definition I provided. Only in a gifting do you address the part I just went back and italicized

Most CPAs and lawyers I've dealt with like it too. Its simple, not full of BS like the F/F definition or other bloated definitions.

In condemnation cases, most definitions in the Instructions to Appraisers provided by the judge are very similar to this one also. Short, sweet, to the point, one good sized, common sense sentence that says everything that needs said.