Fair Market Valuation Reporting & Guidelines

You may not need to submit an FMV if your Entrust account only holds cash, precious metals, or publicly traded securities. You also may not need to submit an FMV if your account holds privately traded assets and there has been no change in the value of any of the assets in the account.

However, you do need to submit an FMV if there has been a change in the value of any assets in your account and your account holds privately traded assets, such as:

• Real estate
• Private Equity
• Promissory notes
• Other non-public investments

The IRS requires an FMV in the following cases:

• Annually — Based on the asset’s value as of December 31
• Taxable events — Such as an in-kind distribution or Roth conversion
• Worthless assets — To confirm that an asset can be removed from your account

FMV Deadlines:

• For annual reporting: Submit your FMV to Entrust by January 31
• For taxable events: Submit an FMV if your last one is more than 90 days old

Not necessarily. You may submit your own FMV along with supporting documentation that clearly demonstrates how the value was determined. While you’re not explicitly required to engage a third party, the documentation must be complete, legible, and reasonable, as it will be kept on file by Entrust in our role as recordkeeper.

Please note: Entrust does not evaluate or approve FMV documentation for accuracy or validity. If the IRS were to review your account, you may be required to justify the valuation. For this reason, many clients choose to work with a qualified, independent third party—such as a CPA, appraiser, or financial advisor—to support their valuation.

According to IRS Publication 590, disqualified persons to your plan are:

• You
• Your spouse
• Your beneficiaries
• Your ascendants, descendants, and their spouses
• Fiduciaries and plan providers

To comply with the Internal Revenue Code, assets must be valued at fair market value. An FMV is the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would pay to a knowledgeable, willing, and unpressured seller in the market.

Entrust is required to report the most current FMV available for the investment(s) in your account at least once a year. If Entrust does not receive the Fair Market Valuation Form, the last known value of the assets in your account will be reported. Please note that the IRS requires annual valuations.

No. All IRA custodians are required by the IRS to report the year-end value of each account, regardless of whether the assets are traditional or non-traditional.

However, with self-directed accounts, the responsibility for determining and providing the value of non-traditional assets—such as real estate, private equity, or promissory notes—falls on the account holder. This is outlined in IRS Form 5305 which states that the account holder is responsible for providing a fair market value of the assets held in their account. Versions of Form 5305 for each account type can be found in the right sidebar of our Forms page.

Unlike publicly traded investments, non-traditional assets are not priced on an open market, so they require individual valuation and supporting documentation. Entrust, as a recordkeeper, reports the value you provide but does not determine the valuation or verify its accuracy.

Your account does. If your account does not have sufficient undirected cash to cover the cost, you will have to make an annual contribution, transfer, or rollover funds from another custodian to pay for the valuation services.

No. You only need to submit one FMV for the single-member LLC indicating its total value.

However, it’s important to note that while Entrust does not require a breakdown of the LLC’s underlying assets, the IRS may request additional documentation to support the valuation if your account is ever audited. For this reason, it’s a good idea to maintain detailed and accurate records of the individual assets held within the LLC and how their values were determined.

Entrust’s role as a recordkeeper means we will retain the FMV and supporting documents you submit, but we do not evaluate or validate the accuracy of the valuation.