How to Determine Fair Market Value of Household Items
Fair market value is not calculated based on a fixed formula. Instead, a variety of factors must be considered to estimate the fair market value of household items, including scarcity, condition of the item and overall desirability. Fair market value is defined by BusinessDictionary.com as the price that a buyer would be willing to pay to a seller under normal market conditions. Since there's no one way to determine fair market value, an average of possible values can be calculated to approximate the fair market value of an item.
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Instructions
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Consider the condition of the household items in question. Items in brand-new condition have greater market value than those in good condition. According to the Internal Revenue Service, household items in poor or broken condition have no intrinsic value, so the fair market value would be zero.
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Research the value of identical or similar items selling online or in local stores. If you have receipts for your original purchase, use those to get the original value.
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Find similar items in similar condition and check the selling price. Places to check include thrift stores, eBay and Craigslist. If nothing similar is available then it's possible that the value increases.
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Use the "Donation Value Guide" on the Salvation Army's website (see Resources) to estimate fair market value figures for your household items.
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Add up the values you have calculated from the various methods. Take the average of those values to get a reasonable estimate of fair market value for each household item.
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References
Resources
- Photo Credit rustic furniture image by Gonçalo Carreira from Fotolia.com
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Comments
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jakkrause
Sep 15, 2010
I keep trying to get the FMV Household Goods guide from the L&R Tax Prep website, but it tells me there is no such website when I hit the link for L&R. Can this be fixed, or are they out of business?
