A fair market value appraisal is a formal opinion prepared by a qualified appraiser to determine FMV for tax reporting, gifting, buy-sell transactions, or estate settlement. The report describes methods (income, market, asset approaches), assumptions, and support for conclusions. For closely held interests, it may incorporate discounts for lack of control (DLOC) and lack of marketability (DLOM). A defensible appraisal underpins sound planning and reduces audit risk.

Before gifting or redeeming interests, advisors order FMV appraisals from qualified firms and brief clients on methods and potential discounts. The appraisal informs coverage amounts for buy-sell or estate-liquidity planning. Keeping reports current helps transactions close smoothly and supports defensible valuations during audits or shareholder negotiations.