Privately held company in an IRA
I have a client who bought shares in a privately held company many years ago…before I …its still profitable and doing well. NFS/Fidelity is the trustee of the IRA now.
The client and I are trying to remove the shares from the IRA so that he can hold them outside. NFS is balking on taking the 3 year old appraisal from the controller of the company. How can this get done?
Anyone have experience with something like this?
Thanks,
Permalink Submitted by Alan - IRA critic on Fri, 2018-02-23 03:02
The custodian is required to report the value of the private shares to the client and the IRS on Form 5498. These shares fall under Code A in box 15. It appears reasonable that the 3 year old appraisal would no longer be a valid estimate of value since much can happen in 3 years. This would be the case whether the shares are removed or not, but if distributed from the IRA the custodian must also issue a 1099R reporting the taxable amount of the distribution. Perhaps NFS could be more specific on exactly what they would accept.