I’m wondering if I can get someone’s opinion on this. There seems to be a question of what fair market value is as defined by the Titus Group LLC. It says "the fair market value shall be the ‘book value’ of the company as then determined by its accountant or other individual who prepares its income tax returns, using generally accepted accounting principles.” My lawyer, who is usually pretty good about these things, said he really was confused to what that means. Has anyone been in a position to have to use this? I remember someone said it was the purchase price plus any improvements but someone else argued that it was essentially what it was assessed for under a new assessment. Any ideas? (I would LOVE to have it the first way!)
Howdy Samantha:
Book value is an accounting value. It is simply the price you paid less and depreciation deducted. It really has nothing to do with fair market value which is what you can get for something given a reasonable time to market it. My friend has an antique store and ever since 911 he has been getting less and less for his wares. His book value is (an antique value guide in this case) is out the window. Pieces he was getting $500 are now only fetching $300 but the book says are worth $800.
The same can hold true in real estate too. I was paying $10,000 for boarded up houses and now they are going fast at $50,000 in some areas I have been looking at.
My friend says it aint what it is worth but what you can get for it from your customers.
I have a house in East Austin for sale right now that appraised at $120,000, which is supposed to be the fair market value. No activity. I reduced the list price to $109,900 and still nothing. I do not care what the fair market value is right now. I just want to sell it and get a profit. Period…
Hope this helps some
Yes it does Ted…Thank you! (any comments on my other post about buying my deceased partners side of the LLC?) Sam