How do i get my IRA custodian to recognize that parts of my Illiquid investment is worthless?
I invested in a private equity several years ago and I know that part of it is worthless, and the sponsoring company is also bankrupt (so they cannot answer questions as they are not there). The IRA custodian (Millennium Trust) only reports the invested amount to the IRS as the amount needed to calculate the RMD. As I am over 71 I am required to take from another IRA the RMD amount (since this account is illiquid). This is an obvious dilemma.
Permalink Submitted by Alan - IRA critic on Wed, 2016-10-19 17:17
If your custodian cannot help you, you might consider a transfer to a large brokerage custodian who might have ways to determine the value. Have you tried to sell the shares? If you cannot sell the shares with an open market order for a couple weeks, that should be enough for the custodian to consider the shares worthless (not sure what you meant by “part of it” being worthless. That would lower your 2017 RMD, but would not help with 2016. For your 2016 RMD to be reduced you would have had to establish that these shares were worthless on 12/31/2015. Do you have other IRA assets to use for your 2016 RMD and are they in the same account as the private equity?