Which of the following represents a characteristic of fair market value?

Fair market value is defined as the price at which property would change hands between a willing buyer and a willing seller, both of whom are informed and acting without pressure. This concept is particularly relevant in various federal tax valuations, such as estate and gift taxes, where the fair market value of assets is critical in determining tax obligations.

Option A accurately reflects a characteristic of fair market value as it is a standard that is used across multiple areas of tax law, ensuring consistency in appraisal processes. Various federal agencies, including the IRS, utilize fair market value to gauge the correct valuation of assets for taxation purposes. This application makes it a crucial element for compliance and reporting.

The other options do not hold true in the same manner. For instance, fair value can differ significantly from fair market value depending on the context, especially in scenarios like legal disputes or financial reporting; thus, not being synonymous in all circumstances. Similarly, fair market value does not require that buyers hold a position of strength—what matters is the willingness and informed nature of both parties in the sale. Lastly, fair market value applies broadly to interests in a business and is not limited to minority interests; it encompasses both controlling and non-controlling interests, depending on the context of the valuation.