What is Fair market Value?

Fair market value (FMV) is an estimate of the market value 

of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market. 

The fair market value establishes a realistic price if the asset was sold in the existing market conditions. Once the fair market value is determined, an owner can establish a selling price or a recipient can obtain the appropriate cost basis for a donation or an inheritance. Without an accurate calculation of the fair market value, risk of loss or tax liability increases.

Source : 

http://smallbusiness.chron.com