Opinion ID: 1163456
Heading Depth: 2
Heading Rank: 2

Heading: Defining and finding fair market value

Text: Fair market value is, of course, that amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. BLACK'S LAW DICTIONARY at 597; see also APPRAISAL INSTITUTE, THE APPRAISAL OF REAL ESTATE 18-22 (10th ed. 1992). For tax purposes, fair market value is determined by use of three common appraisal approaches: capitalizing the income stream, estimating replacement cost less depreciation, and estimating market value by comparable sales. § 42-221(E). [3] The Arizona Legislature has rarely used its power to prescribe an alternative to the fair market value concept of full cash value for tax valuation purposes. [4]