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Guide: Reporting Your Fair Market Valuation

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Estimated reading time: 4 minutes

Every year, the IRS requires a report of the value of your IRA assets with a Fair Market Valuation. Valuation of assets in a self-directed account must be provided to your self-directed IRA administrator to ensure proper tax reporting to the IRS. A fair market value is an estimate of the market value of an asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.



IRS Requirements

  • The IRS requires a self-directed IRA administrator such as Entrust to provide the FMV of our clients’ accounts as of Dec. 31 of each year.
  • The valuation is paid for by the IRA and if your account does not have sufficient un-directed cash to cover the cost, you will have to add cash by making an annual contribution, transfer, or roll over funds from another custodian to pay for the valuation.
  • The FMV Form must be provided to your IRA administrator on a yearly basis – due by Jan. 31 – to ensure proper tax reporting.
  • An FMV is also required when you’re taking an in-kind asset distribution, converting an asset and re-characterizing an asset.

 

Performing Valuations
To properly report the FMV of an asset, a qualified, independent third party should perform the valuation and then complete the FMV. A qualified, independent third party may be a:

  • Certified Appraiser
  • Licensed Real Estate Professional (such as Broker/real estate agent)
  • Knowledgeable Party (such as CPA, Attorney, Financial Planner, etc. who is strictly at “arms length” to both you and the investment)

Using Forms
  • The FMV Form must be signed and dated by both the client and the valuator, if an appraisal is not required. If the appraisal is required, the appraiser does not have to sign the FMV Form. The appraisal report is sufficient. 
  • A separate FMV Form must be completed for each asset held in your account.
  • The form, as a final step, needs to be sent to your administrator with supporting documents, which may include:
    • A Real estate fair market value analysis, more commonly known as a Comparative Market Analysis (CMA). This is a detailed report examining the homes currently on the market, under contract, recently sold and recently expired, withdrawn or canceled to determine what a property is worth in the current market.

Sending in Your Forms

By Mail

By Email

Via Entrust Client Portal

 

The Entrust Group
Attention: FMV
555 12th Street, Suite 1250
Oakland, CA 94607

 

fmv[at]theentrustgroup[dot]com

Login to your account and complete the Fair Market Valuation Form from the “Transactions” tab.

Please return the FMV/FMVR Form with supporting documentation to Entrust by January 31, 2018.

Important Guidelines

  • The Fair Market Valuation Form must be signed and dated by you
  • If an appraisal is required, the appraiser does not have to sign the form; the appraisal report is sufficient
  • If an appraisal is not required, the third party valuator must also sign and date the form
  • The form must be sent to Entrust with supporting documents
  • A separate Fair Market Valuation Form must be completed for each asset held in your account
  • You DO NOT need to take any action if your account(s) exclusively hold Precious Metals or cash.

Download the Fair Market Valuation Form here.

Click here to visit our FMV page on the Entrust website for further information about submitting your FMV Forms. 

As always, please feel free to contact our Client Services Department with questions or concerns at 
800-392-9653, option 1. 

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