American IRA is a National Provider of Self-Directed IRAs with over $250 million in assets under administration. They build their business by helping their clients stay well informed and by offering free education to both the beginner and the seasoned investor. This announcement covers the Fair Market Valuation requirement of Self-Directed IRAs which are due after the end of the year. Most custodians/administrators request them in the 1st quarter of the new year in order to be able to provide them to the IRS by the May deadline.

American IRA has been a National Provider of Self-Directed IRAs since 2004 and has experienced such an increase in demand for Self-Directed IRAs that they have doubled their staff over the last 2 years in order to meet the needs of their ever increasing client base.

Jim Hitt, CEO of American IRA, says “Investors are looking to have more control over their IRAs and that has greatly increased the amount of new clients we have. This is a great situation as we love that the message is getting out and that more people are taking control of their retirement accounts.”

An important announcement regarding self-directed IRAs:

American IRA announces that the Fair Market Valuations are due after the end of the year. Most custodians/administrators request them in the 1st quarter of the new year in order to be able to provide them to the IRS by the May deadline.

With traditional stocks, fair market valuations are not necessary because the market evaluations are done on a daily basis and publicly reported. In contrast, most assets held within a self-directed IRA are non-traditional assets and, since the values of these assets change depending on many factors, a yearly outside evaluation is required by the IRS. It is important to note here that utilization of tax value is generally not accepted by most custodians/administrators.

For American IRA clients that means a qualified independent third party should perform the valuation and then complete both sections of the Fair Market Valuation Form, including their signature. When providing an asset’s current value, please provide all supporting documentation to substantiate the value. Please be advised that this valuation / appraisal will be used for reporting purposes to the Internal Revenue Service and that any false or misleading valuation / appraisal of any assets may result in penalties and or fines assessed to the account holder(s).

It is as easy as counting to 4 – clients need to:

1. Enter their account information per self-directed investment they maintain with American IRA, LLC. (Example-2 Assets requires 2 separate valuations)

 

1. Enter the current fair market value of their investment identified by this form. To avoid any concerns with self-dealing of your self-directed investment, a qualified, independent third party** should complete the valuation or appraisal
   **Documentation-Please include supporting documentation with regards to this valuation/appraisal.

 

1. List the contact information of the qualified, independent third party providing the valuation/appraised value of their self-directed investment. The qualified, Independent third party may be:
   • Managing Partners
   • Certified Appraisers
   • Certified Commercial Realtors
   • Independent Valuation Company
   • Knowledgeable Party

 

1. Follow these requirements:
   1. Real Estate: Broker’s Opinion of Value or Appraisal. We can not use tax values.
   2. LLC: Valuation needs to be completed by the manager of the LLC.
   3. Promissory Note: Secured or Unsecured. Can be valued at the current principle balance.
   4. Gold, Charles Schwab Accounts, and Fidelity Accounts: Can be valued at market value.

If you have any questions about this or about self-directed IRAs, please contact our knowledgeable staff.