Revenue Ruling 59-60 defines the concept of fair market value for the purpose of appraising businesses and business ownership interests for gift and estate tax purposes. This famous ruling of the Internal Revenue Service (IRS) is at one and the same time the most often quoted ruling or statute applicable to the valuation of businesses, and also the least understood. The language of Revenue Ruling 59-60 is often quoted by appraisers, lawyers, and judges. Unfortunately, it is often quoted out of context and even misquoted.

A review of Revenue Ruling 59-60 is a good first step in understanding the standard of value known as fair market value. The ruling provides basic underpinnings for the broader and more detailed understanding of fair market value that has developed over the last several decades. The entire ruling is presented in this ebook in short excerpts. Following each portion from the Ruling are comments from Z. Christopher Mercer (in italics).

This ebook is among the best sources for what Revenue Ruling 59+60 says and does not say about the standard of value known as fair market value that it defines and describes.