Almost Time for Fair Market Valuations

It’s never too early to start thinking about the fair market valuation of assets in your self-directed IRAs, especially as the end of 2018 approaches and our attention diverts toward winter weather and holiday festivities. Fair market valuations, or FMVs, are critical to New Direction Trust Company in maintaining the most accurate possible record for your alternative IRA investments. Upon receipt of your FMV, we will coordinate prompt communication to the IRS to ensure the full compliance of your IRA. The absence of FMV information compromises our ability to fulfill our custodial duties and may therefore bear considerable consequences from the IRS. As such, we encourage you to start the process as soon as possible and contact our office with any questions or concerns.

When assembling your FMV paperwork, please remember to complete our Fair Market Valuation Form. This form includes detailed instructions on FMV preparation and allows you to clearly dictate the applicable values. You must also provide supplemental documentation to affirm the valuation. Valid submissions to this effect include any official documentation from a certified public accountant, broker, appraiser, or any other third-party valuator that specializes in the particular asset(s) your self-directed IRA holds. E-mail communication, advertisements, or Schedule K-1s may not be submitted as supporting documentation for an FMV.

We record the total value of your IRA on a Form 5498 and forward the document directly to the IRS and to you. 5498s report total contributions for the year in addition to FMV information. As such, they will not be issued until after the contribution deadline (tax day) to ensure that any last-minute deposits are accounted for. Precious metals clients are not required to submit third-party FMV information. The collective market/spot value of your precious metals holdings (as of December 31) will be specified on your Form 5498.

Please don't hesitate to contact our client relations specialists at 877-742-1270 or info@ndtco.com. You may submit completed FMV documentation via e-mail to valuation@ndtco.com or via fax to 303-665-5962.

Add a comment

Loading