Annual Valuations: What You Need to Know

Annual Valuations

Each year, your IRA Custodian completes a Form 5498 and submits a copy to you as well as the IRS. The form reports your annual contributions to the IRA as well as amounts that were rolled over during the year. Also included is the type of account, required withdrawal amounts. and the value of the IRA as of Dec 31st.

While an IRA invested in stocks and bonds can be easily valued as the price per share at the end of year, a self-directed IRA invested in non-traditional assets can be a little more difficult to evaluate.

As of 2015, the 5498 Form will require additional specific information on hard-to-value assets; forms for distributions (1099-R) will be affected as well. The new regulations will also be of benefit if your assets lose value as the Forms will be a more accurate reflection of this change.

To complete Form 5498, your Custodian will require a year-end valuation from your Check Book IRA. Since undervaluation of an account (or likewise overvaluation) can cause many issues, it is very important to submit an accurate accounting to your Custodian.

Depending on your assets (precious metals, property, tax liens), you may want to consider enlisting the help of a professional. Fees for this service may range from $50 to $100 or more. However, you aren’t required to use the services of a professional. Either way, it is important to keep good records and have the necessary documents (bank records, metal prices, property values) to show your estimated account value at year end.

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    1 Comment

    1. Anne G.

      Great article. Thanks for the info, you made it easy to understand. BTW, if anyone needs to fill out an “IRS 5498 Form ”, I found a blank fillable form here: This site PDFfiller also has some tutorials on how to fill it out and a few related tax documents that you might find useful.