Roth IRA Conversion
I have a number of non performing mortgages in my traditional ira and wish to value them at a discounted amount and do a roth conversion at the discounted amount.
Looking for a qualified person who can do the valuation.
It has been suggested to me that I place all of the non performing mortgages into a new LLC and be able to take a further deduction of value because they are in an LLC, but that sounds HOKEY to me
Permalink Submitted by Alan - IRA critic on Tue, 2022-09-06 21:21
Your self directed IRA custodian is responsible for determining the value of all investments in the account as of the end of each calendar year and on any date you take a distribution including a conversion. The FMV at the time of conversion will be reported on Form 1099R. The custodian must also report total account value on the annual Form 5498 and disclose the nature of the investments on that form. If they cannot do this math or are only willing to do it once per year, then you will probably have to hire a professional to provide them with the data in the form they require. If mortgage payments are in default, that should considerably reduce the taxable value of the conversion amount. Note that when you approach RMDs, you will also need to provide some liquidity in the IRA or check with the custodian regarding the effects of in kind RMD distributions out of the IRA. Having any particular mortgage partially in an IRA and outside the IRA would be a mess that you should avoid. Otherwise, a SD IRA custodian that holds mortgages should have more expertise on your options than you would get here since they probably deal with these on a daily basis.