What Does Revenue Ruling 59-60 Mean?
Revenue Ruling 59-60 is a law the Internal Revenue Service (IRS) issued in 1959. It refers to the price of a property reasonably agreed upon by a seller and a buyer.
It is more popularly known as fair market value (FMV).
Insuranceopedia Explains Revenue Ruling 59-60
Fair market value stresses that the transaction between buyer and seller is amicable. In other words, both parties are involved in the transaction under fair conditions and neither party transacted under any kind of duress.
FMV is a popular concept and an important one as well, since it is used when calculating taxes. However, its critics question the credibility of the concept, since it is impossible to establish that a sale has indeed been completed under fair market value conditions.