Fair Market Valuations

The IRS requires owners of all retirement plans, self-directed or not, to report the fair market value (FMV) of assets held in the account(s) at the end each year.

One valuation form must be completed for each asset your plan(s) holds. The worth of your asset(s) is assigned based on an estimate of market value at the time of valuation, not cost.

In order to comply with IRS regulations you must:

  1. Have an independent, neutral party complete the valuation of your asset(s).
  2. If the valuation has an expense, it must be paid with your IRA funds.
  3. The value is established as of December 31st of the reporting year.
  4. You must supply an individual form for each asset valuation.
  5. Each form must be signed by you and the qualified person who performed the valuation(s).
  6. Supporting documents (i.e., property appraisals, balance sheets) must accompany the FMV form(s).
  7. Supply all of the above to Advanta IRA so we can submit the information to the IRS on your behalf and provide you with a form 5498 for your records.

If you have any questions regarding FMVs, IRS rules governing these reports, and Advanta IRA’s role in the process, please contact us. While we cannot assist in determining the value of your assets, we can answer any questions and fully explain the process and requirements for you.

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