FMV stands for Fair Market Value. This is the price that you could reasonably expect to buy an item for in a local store. It's important to determine the FMN of the prizes you win, because taxes in the United States are based on FMV, not on ARV (Average Retail Value) or MSRP (Manufacturer's Suggested Retail Price).
Note that FMV is not the same as the price that you can receive if you sell a prize. For example, if you win a television that sells for $1,000 at a nearby electronics store, and you "sell" it to your spouse for $1, the FMV is still $1,000.
Even if you sell the prize on eBay for $800, the FMV is still $1,000, because you are technically selling it used on eBay, even if you've never taken it out of the box.
However, if you see an ad for the exact same television on sale at a local electronics store for $850, you could reasonably claim an FMV of $850. However, you should obtain a copy of a sales circular or similar proof to substantiate your FMV claim for the IRS.
