The most widely accepted standard of value is "fair market value." This standard applies in all federal and state tax matters and has been adopted for most valuation purposes indicates Los Angeles Business Attorney Steven C. Peck.
In appraisal parlance, it is broadly stated to be the amount that is fair and equitable to the parties to a transaction. The common definition is the amount at which property would change hands between a willing seller and a willing buyer when neither is acting under compulsion and when both have reasonable knowledge of the relevant facts says California Business Attorney Peck.
Fair market value is almost universally accepted as the cash or cash-equivalent, price. The terms "market value", "cash value", and "investment value", often used in statutes and opinions, have usually been interpreted as equivalent to fair market value.
The distinction between fair market value for continued use and fair market value in liquidation (when the seller is under a compulsion to sell) should be considered in an appraisal; each requires its own valuation techniques.
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