Revenue Ruling 59-60

What Does Revenue Ruling 59-60 Mean?

Revenue Ruling 59-60 is a guideline issued by the Internal Revenue Service (IRS) in 1959. It pertains to the price of a property that is reasonably agreed upon by both the seller and the buyer.

This ruling is more commonly referred to as fair market value (FMV).

Insuranceopedia Explains Revenue Ruling 59-60

Fair market value (FMV) emphasizes that the transaction between the buyer and seller is conducted amicably. In other words, both parties engage in the transaction under fair conditions, with neither party being under any form of duress.

FMV is a widely recognized and important concept, particularly in tax calculations. However, its critics argue that the credibility of FMV is questionable, as it is impossible to definitively prove that a sale has truly occurred under fair market value conditions.