What is fair market value” and how might it differ from what a buyer might pay for a business?
Fair market value is typically defined based on the definition prescribed under Internal Revenue Service (IRS) Revenue Ruling 59-60, several other pronouncements, and a large body of case law as follows: The price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. Court decisions frequently state in addition that the hypothetical buyer and seller are assumed to be able, as well as willing, to trade and to be well informed about the property and concerning the market for such property.
Fair market value is typically defined based on the definition prescribed under Internal Revenue Service (IRS) Revenue Ruling 59-60, several other pronouncements, and a large body of case law as follows: The price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts. Court decisions frequently state in addition that the hypothetical buyer and seller are assumed to be able, as well as willing, to trade and to be well informed about the property and concerning the market for such property. In other words, in applying the standard of fair market value, we assume that: • the equivalent of cash is being paid for the subject being appraised as of the Valuation Date; • it refers to price rather than the proceeds of the sale of a property; • the company (interest) being valued has been placed on the op
