What is the deadline for FMV reporting? – Accuplan

For individuals with Self-Directed IRAs (SDIRAs), Fair Market Value (FMV) reporting is an important annual requirement to remain compliant with IRS regulations. The deadline for submitting FMV information is critical for meeting tax obligations and ensuring proper retirement planning.

FMV Reporting Deadline: March 1st

The IRS mandates that owners of all retirement plans, including SDIRAs, report the fair market value of assets held in their accounts at the end of each year. For Self-Directed IRAs, FMV reporting is required by March 1st each year for the previous year’s assets as of December 31st.

FMV Reporting Date: Assets must be valued as of December 31st of the preceding year.
Submission Deadline: The FMV report must be submitted by March 1st to ensure compliance with IRS requirements and allow for timely tax filings.

Why is FMV Reporting Important?

Accurate FMV reporting is vital for several reasons:

Required for IRS Form 5498: The FMV of the assets in your SDIRA is reported on Form 5498, which is filed with the IRS by the custodian (e.g., American Estate & Trust) to report key information about the IRA, including the value of the assets. This form is essential for IRS tax records and to track contributions, rollovers, RMDs (Required Minimum Distributions), and other important data.
Compliance with RMD Calculations: Failure to submit the FMV on time could result in incorrect RMD calculations. The IRS uses the FMV to determine whether you are meeting your RMD requirements. Not filing on time may result in tax penalties.
Avoiding Penalties: If FMV is not submitted by the deadline, the last known value of your assets will be reported, which could lead to issues with your tax filings and potential IRS penalties.

The FMV Reporting Process

To comply with the FMV reporting requirement, here’s what you need to do:

Assess the FMV of Your Assets: The value must be determined as of December 31st of the reporting year. Different types of assets (real estate, LLCs, precious metals, etc.) have specific valuation methods that should be followed.
Provide Supporting Documentation: Supporting documents—such as appraisals, market analyses, or tax bills—are required to verify the value of the asset. If the asset is held in an LLC or private placement, third-party documentation is typically needed to confirm the valuation.
Submit the FMV Report: Submit the FMV form through your IRA custodian’s online portal (like the AET Client Portal) or by mail if required. Ensure that all the necessary documentation is uploaded before the March 1st deadline.
IRS Form 5498 Submission: The custodian, once receiving the FMV report, will file Form 5498 with the IRS, providing an official snapshot of the IRA as of December 31st, including the asset values.

Consequences of Missing the FMV Reporting Deadline

Failing to meet the FMV reporting deadline can lead to several issues:

Incorrect Tax Reporting: The IRS will use the last known value of your assets for reporting purposes, which may not reflect your current holdings.
Delays in RMD Processing: If your FMV isn’t submitted on time, your RMD calculation could be incorrect, potentially leading to tax penalties.
Compliance Issues: Not adhering to the deadline can cause issues with IRS compliance, affecting both your tax filings and your IRA’s standing.

Conclusion

The deadline for FMV reporting for Self-Directed IRAs is March 1st each year for assets valued as of December 31st of the previous year. Submitting your FMV on time is crucial for compliance with IRS regulations and to avoid penalties related to incorrect tax reporting or RMD calculations. Be sure to assess the value of your assets accurately and submit all required documentation to your IRA custodian before the deadline.

Frequently Asked Questions: Asset Valuation Requests for SDIRAs

1. Why do I need to submit asset valuations each year?

The IRS requires all SDIRA custodians to report the fair market value (FMV) of assets held in retirement accounts annually. This ensures accurate tax reporting and compliance.

2. What if my investment has failed or is no longer worth anything?

If you believe your asset is worthless or uncollectable, you may request a $0 valuation. However, AET must receive supporting documentation that clearly proves the asset has no remaining value.

3. What kind of documents are required to support a $0 valuation?

Acceptable documentation may include:

A letter from the issuer confirming the asset is defunct or has no value
Bankruptcy or dissolution filings
Final statements showing a $0 balance
A third-party valuation report confirming the asset is worthless

The required documents may vary depending on the asset type.

4. I submitted documents, but my request was placed On Hold. Why?

This usually means the documents provided did not meet IRS or AET standards. Common issues include:

Missing or outdated information
No clear statement of the asset’s worthlessness
Documents not signed or verified by a third party

We’ll notify you of what’s missing so you can resubmit.

5. Can AET just accept my word that the asset is worthless?

Unfortunately, no. As a regulated custodian, AET must be confident that the asset truly has no value. Accepting unsupported $0 valuations could result in IRS penalties for both you and AET.

6. What happens if I don’t submit a valuation or provide the right documents?

If no acceptable valuation is received, AET will continue to report the last known value of the asset to the IRS. This may not reflect the true status of your investment and could affect your account reporting.

7. How do I submit my valuation request and documents?

All valuation requests must be submitted through the AET online portal. You’ll be guided through the process and prompted to upload any required documents based on your asset type.

8. Who can I contact if I need help?

Our Support team is here to help! If you’re unsure what documents are needed or how to submit them, please reach out and we’ll walk you through the process.