Understanding 'Fair Market Value'

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Fair market value is defined by IRS section 1.170 and 20.2031(b) as “the price at which the 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.” Insurance appraisals or replacement values are representative of what it would cost to purchase your item from a gallery or original maker.

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