IRA Annual Fair Market Value Summary

Tuesday, February 04, 2014

By Joe Cicchinelli, IRA Technical Expert

Follow Me on Twitter: @JoeCiccEdSlott

By now you should have received a statement from your custodian about your IRA’s fair market value (FMV). The custodian that houses your IRA is required by IRS rules to send you certain information about your IRA by January 31 of each year.

One of the pieces of information the custodian has to send you is your IRA’s year-end FMV. Specifically, your IRA’s December 31, 2013 FMV must be reported to you by January 31, 2014. This rule applies to all IRAs, including SIMPLE, SEP and Roth IRAs. It also applies to beneficiary (inherited) IRAs. Even if you didn’t make any IRA contributions or rollovers in 2013, you still will be sent the year-end FMV information. The FMV is critical for calculating the required minimum distribution.

If you made any contributions or rollovers in 2013, then those contributions will likely be reported on the year end-statement as well. Custodians have to report to you any contributions you made for 2013 on either IRS Form 5498, or a substitute statement such as the FMV statement. The due date for reporting those 2013 IRA contributions to you is June 2, 2014.

But sometimes a custodian won’t send you a copy of IRS Form 5498, but will instead use the annual FMV statement as a substitute for that IRS form. If the custodian does this however, certain information must be on the statement so you know there’s important IRA information on it. For example, the custodian must put the words “This information is being furnished to the Internal Revenue Service” and tell you exactly which information is being sent to the IRS, such as rollovers, annual contributions, and the year-end FMV.

Another piece of information that may be on your annual FMV statement is about required minimum distributions (RMDs). If you are an IRA owner (not a beneficiary) and are age 70 ½ or older this year, the custodian has to tell you that you have to take an RMD for this year. This information is often printed on your annual FMV statement as well.

 

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