Defining Fair Market Price Need help with an appraisal? Search our database of ISA members to find a certified residential or commercial property appraiser near you. Find an ISA Member " A number of us keep in mind being in Core Course and remembering, yes, memorizing, the Federal definition of Fair Market price (FMV). This was back when the Core Course test was short essay, fill-in-the-blank, and several choice. Now the exam is numerous choice and remembering the definition is not a prerequisite to passing the test. However, if you were one of individuals who remembered the definition, do not stop reading! FMV is probably a bit more complicated than you keep in mind. First, there can be numerous meanings of fair market value relying on the meant use of the report, and possibly the state or province that you live in. Second, even though there is just one Federal definition of FMV, you must cite the definition of FMV differently depending upon the planned use of the appraisal report. The Definition of Fair Market Value Let's start with the federal meaning of FMV and a quick history lesson. The top place to discover assistance is within the IRS regulations. A very long time ago (pre-1985), the definition of FMV for a noncash charitable contributions was merely: The meaning of FMV for estates was a slightly various and an expanded definition. It came from the Estate Tax Regulations: So, while the meanings were similar, the IRS argued that there were distinctions in between the two meanings. In 1985, the IRS lost that argument in court. In Anselmo v. Commissioner, 757 F. 2d 1208 (11th Cir. 1985), the 11th Circuit Court of Appeals affirming the Tax Court held that "there need to be no distinction between the step of fair market price for estate and present tax and charitable contribution functions.