TYPES OF VALUE
Replacement Value (RV) estimates the highest amount required to replace the subject property with another of similar and like quality and condition within a reasonable period of time and in an appropriate and relevant market. Replacement Value is used for insurance appraisals to establish the appropriate level of coverage or to settle a claim stemming from a damage or total loss.
Fair Market Value
Fair Market Value (FMV), as defined by IRS Treasury Regulation Section 1.170A-1(c)(2) and Section 20.2032(b) of the Estate Tax Regulations is “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 sell and both having reasonable knowledge of relevant facts.” Fair Market Value takes into consideration the most appropriate and relevant open market conditions and is used in appraisals for IRS estate tax, gift tax, and charitable contribution purposes, equitable distribution of assets, and art financing purposes.