What is fair market value (FMV) and how is it determined?
1. Fair market value is the price that property would sell for on the open market. It is the price that would be agreed on by a willing buyer and a willing seller. Usually, items are worth much less than what you originally paid for them. For example, if you give clothing to a qualified organization, the FMV would be the actual price that typical buyers pay for clothing of the same age, condition, style, and use. 2. Determining the value of donated property is not simple. You must consider all factors connected with the property, such as its desirability, use and scarcity. Formulas can be used, but there is no single formula that applies when determining value, and using formulas seldom results in acceptable determination of FMV. For example, donated furniture should not be evaluated at a fixed rate (e.g., 15 percent of the cost of new replacement furniture). When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. Or i
