Understanding Firearm Valuation
- Drew McDermott
- 1 day ago
- 4 min read
Fair Market Value, Marketable Cash Value, and Appraised Value
When families, executors, or fiduciaries begin sorting through an estate, one of the first questions they ask about firearms is simple: what are they worth? The challenge is that “value” is not a single number. Firearms can carry three very different values depending on the purpose and the standard being applied. If you want to file an accurate probate inventory, avoid disputes among heirs, or make the right decision about liquidation, you need the correct definition for the task in front of you.
Below is the framework I use for every MDRF appraisal assignment. These distinctions come straight from professional appraisal practice, the Uniform Standards of Professional Appraisal Practice (USPAP), and the way the real market behaves. Understanding the differences will help you make informed decisions that stand up in court, satisfy beneficiaries, and protect the integrity of the estate.
Fair Market Value:
What a Willing Buyer and Willing Seller Agree On
Fair Market Value (FMV) is the standard used by courts, the IRS, and most professional appraisal assignments. FMV represents the price a willing buyer would pay and a willing seller would accept when neither party is under any pressure. Both sides understand the facts, the condition of the firearm, and the typical market.
This is the value used in:
IRS Form 706 for estate tax
Insurance coverage adjustments
Equal distribution among heirs
FMV reflects retail-level pricing supported by comparable sales. To determine it, I reference:
Recent auction results from Rock Island, Morphy, GunBroker and similar markets
Condition grading using PPGS
Manufacturer variants, rarity, and local demand
FMV is not the same as a quick-sale price. It is the number that represents fair, knowledgeable, normal market behavior.
Marketable Cash Value:
The Real-World Liquidation Price
Marketable Cash Value (MCV) is what you can convert the firearm into today if you want cash without delay, without listing it, and without accepting risk. It is the walk-away number. Families choose MCV when they want to remove firearms quickly, finalize an estate without additional work, or avoid the risks of selling to the general public.
MCV is always lower than FMV because it reflects:
Time required for resale
Federal compliance costs
Storage, insurance, and risk
Market fluctuation
Cleaning and inspection
Listing fees and credit card fees
The easiest example is the used car model. A dealer buys below retail because they assume the resale risk. Firearms work the same way. A licensed FFL or estate-buying specialist carries the responsibility to resell, comply with federal law, and handle the entire process. MCV is the cash value that accounts for these realities.
Families often choose MCV when they want a fast, compliant solution or when an executor needs to simplify the entire asset list.
Appraised Value:
A Documented and Defendable Professional Opinion
Appraised Value is not simply what something is “worth.” It is a formal document prepared by a qualified appraiser using verifiable data, professional methodology, and a recognized grading standard.
Appraised Value is used in:
Legal proceedings
Insurance policies
Trust documentation
Disputes or contested estates
High-value collections
USPAP-compliant work for fiduciaries
An appraised value assignment often uses FMV as the required definition, unless the attorney, trust officer, or insurance carrier needs a different standard such as Replacement Value or Liquidation Value. A formal appraisal includes identification of the firearm, PPGS condition grading, valuation methodology, comparable sales, photographs, and a digitally signed certification.
This is why attorneys, accountants, and fiduciaries often choose an appraisal even when the family only plans to sell. It removes uncertainty, manages risk, and documents the asset in a way courts recognize.
How the Three Values Work Together
It helps to think of these three numbers as tools. Each serves a purpose.
Fair Market Value is the standard for courts and the IRS.
Marketable Cash Value is the practical, immediate cash number.
Appraised Value is the defensible, documented opinion that supports legal and professional decisions.
Families sometimes assume all three numbers should match. They rarely do. The correct value depends entirely on the goal, the level of documentation required, and the legal environment surrounding the estate.
Why This Matters for Estate Work in Missouri
Firearms in estates require careful handling. A misapplied valuation standard can cause:
Incorrect probate filings
Unequal heir distributions
Undervalued insurance coverage
Legal exposure for executors or trustees
By using the appropriate value type and documenting it correctly, you protect the estate, the fiduciaries, and the beneficiaries. This is the foundation of every professional engagement I handle at MDRF. Whether the assignment is a single heirloom revolver or an entire collection, the goal is simple: deliver an accurate, legally sound value that supports the estate’s needs.
A Final Thought
When firearms enter probate or a professional estate process, value is never one number. The right valuation standard keeps everyone aligned and prevents mistakes. If you are helping a family, acting as an executor, or managing a trust, I can help you determine the correct valuation framework for your situation and provide the documentation you need for a compliant and clean estate file.
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