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Purchase Price vs Replacement Value vs Fair Market Value
These figures answer different questions. Purchase price records what you paid; replacement value may support insurance; fair market value is a purpose-specific valuation concept used in some appraisal, estate, donation, and other contexts.
Why this question is harder than it looks
The correct value depends on the assignment, effective date, market, intended use, and evidence. One number should not be copied into every form simply because it is available.
A practical way to decide
- Label every value by type, date, source, currency, and purpose.
- Keep the purchase invoice separate from later appraisals.
- Ask an insurer which value basis its policy uses.
- Use qualified appraisal advice for tax, estate, litigation, or material donation decisions.
- Update the object record without deleting prior values.
What this does not establish
Tax and appraisal rules change and are jurisdiction-specific. This article is educational and not tax, legal, insurance, or appraisal advice.
Next step
Check an artwork to organize public evidence about a specific listing. The tool provides research context, not authentication or appraisal.
Sources
- Publication 561: Determining the Value of Donated PropertyInternal Revenue Service
- Art Appraisal ServicesInternal Revenue Service