Abstract:
In this article, begins with the observation that the common definition of fair market value of property fails to resolve fair market value issues in many cases. The author contends that the determination of fair market value can be divided into two inquires. First, is fair market value the amount it would cost a similarly situated taxpayer to purchase the property or the amount the taxpayer would realize on the sale of such property. These two measures of value are termed the replacement value and the liquidation value, respectively. The article then sets forth an approach for determining which of these measures to use. The article further contrasts this approach with that of the IRS in the areas of charitable contribution and suggests a method to determine appropriate value one the standard has been chosen.