In chapter 4, Dianne Taylor won a 2011 Honda Accord on "The Price is Right" TV show. She has to pay taxes on her prize. The taxes are based on the car's ________ value.

Question

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The fair market value is the most accurate representation of the value of the car for tax purposes. It is determined by what a willing buyer would pay a willing seller in an arms-length transaction. The residual value is the estimated value of the car at the end of a lease agreement, while the manufacturer's suggested retail price is the price suggested by the manufacturer for the sale of the car, and the invoice price is the amount the dealer paid for the car. None of these are typically used for tax purposes.

In Chapter 4, Dianne Taylor Won a 2011 Honda Accord