Which term is used for the gross value of a property, defined as the fair market value before deducting mortgages or liabilities?

• A. Arm's-length transaction
• B. Fair market value
• C. Incidents of ownership
• D. Gross value

Answer: (D)

This tests the distinction between gross value and net value in property valuation. Gross value is the property's value at fair market value before subtracting any debts or liabilities. That pre-deduction figure is exactly what the definition describes, so gross value is the correct term. Net value would be what remains after mortgages and other liabilities are deducted. While fair market value describes the market price the property would fetch, the term asked for emphasizes the pre-deduction total, which is gross value. The other options describe related concepts but don’t label the pre-deduction total: an arm's-length transaction is about how a sale occurs between unrelated parties; incidents of ownership refer to the rights in the property.