NASHVILLE, Tenn. (RFD-TV) — Farmers frequently face decisions that depend on knowing the true value of their assets, making fair market value (FMV) an essential concept in farm management, tax planning, and estate transitions. Kevin Burkett, Extension Associate and Assistant Director of the Ag Tax School at Auburn University, says FMV matters because it determines how land, equipment, and other farm assets are valued when ownership changes or financial records are updated.
FMV represents the price an asset would bring in an open market between a willing buyer and a willing seller, without pressure to buy or sell. That definition becomes especially important in estates, where heirs often receive a step-up in basis that requires an accurate FMV determination, even when no sale occurs.
For producers, getting FMV right helps avoid undervaluing property during sales, estate settlements, or lending discussions. It also prevents overvaluation when assessing depreciation, tax liabilities, or potential capital gains. Because market prices shift over time, Burkett notes that farmers often rely on recent sales, listings, or professional appraisals. Qualified appraisers evaluate comparable sales, replacement cost, and income-generating potential to assign an accurate value.
Looking ahead, producers planning transitions, expansions, or succession should maintain solid documentation and seek guidance from trusted advisors — accountants, attorneys, tax specialists, and appraisers — to ensure valuations reflect actual market conditions.
Farm-Level Takeaway: Fair market value shapes taxes, transitions, lending, and sales, making accurate valuation essential for long-term planning.
Tony St. James, RFD-TV Markets Specialist
In part four of his blog series, “Top 10 Developments in Ag Law and Tax in 2023,” Roger McEowen tackles issue number four, the Employment Retention Credit.
January 31, 2024 09:00 AM
·
In part three of his blog series, “Top 10 Developments in Ag Law and Tax in 2023,” Roger McEowen covers the Corps of Engineers’ mismanagement of Missouri River water levels.
January 30, 2024 02:29 PM
·
Two more key developments in ag law and taxation from 2023, a crackdown on biodiesel fraud and developments in self-employment taxation (#7 and #6), are the topic of today’s Firm to Farm blog post, the second in a series by RFD-TV agri-legal expert Roger McEowen.
January 18, 2024 12:44 PM
·
The start of the review of the most important ag law and tax developments of 2023—that is the topic of today’s Firm to Farm blog post by RFD-TV agri-legal expert Roger A. McEowen
January 04, 2024 12:20 PM
·
Recent developments in ag law and tax — that is the topic of today’s Firm to Farm blog post by RFD-TV-Agri-Legal Expert Roger McEowen.
December 19, 2023 02:45 PM
·
If you are thinking about making substantial gifts and/or doing so in a complicated fashion, make sure to get good professional advice beforehand. In his latest Firm to Farm blog post, RFD-TV Agri-Legal Expert Roger McEowen tackles the complex rules surrounding financial gifts, charitable donations and estate transfer.
December 15, 2023 03:12 PM
·
