Replacement vs. fair market value
Why the same item can carry two values.
The number on an appraisal is not a single fixed figure — it depends on the definition of
value the assignment requires.
- Replacement value — what it would cost to replace an item with a comparable one; used for insurance.
- Fair market value — the price between a willing buyer and seller; used for estates, gifts, and the IRS.
- Marketable cash / liquidation value — net proceeds from a sale; used for resale and division.
- We confirm the correct basis with you before any value is reached.