Explore Your Self-Directed IRA Options.
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Explore Your Self-Directed IRA Options.
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Yes. The IRS gets your IRA's value every year on Form 5498. If your self-directed IRA owns a rental, a private note, or an LLC, no stock ticker sets the price. You usually supply that number, called a Fair Market Valuation, or FMV, and your IRA's Administrator reports it.\A fund has a price on a screen. A duplex in Twin Falls does not. So once a year, someone has to say what it's worth, and that someone is usually you.
A fund has a price on a screen. A duplex in Twin Falls does not. So once a year, someone has to say what it's worth, and that someone is usually you.
Usually you do, since you know the asset best. At Mountain West IRA, a self-directed IRA Administrator in Boise, Idaho, we ask for each asset's FMV once a year, on the anniversary of the date your IRA bought it. We don't pick the number, and we don't judge your deal.
The goal is fair market value. That is the price a willing buyer would pay a willing seller, with no one under pressure and both sides knowing the facts. The IRS form asks for a number. It doesn't hand you a formula, so the work is finding a number you can explain.
Form 5498 shows the value of your whole IRA, and it flags hard-to-price assets. Box 5 holds the value of everything in the account at year end. Box 15a holds the value of certain hard-to-price assets. Box 15b holds a code that says what kind they are, like D for real estate or B for a private loan.
The IRS sees this form, and you get a copy. The tax code also says you must get your year-end report by January 31. If you owe a required payout, the form or a separate notice tells you that too.
Form 5498 has a box for the value. It has no box for an appraisal. So the form itself doesn't ask you for one. What you want is a number with a paper trail behind it.
For a house, that might be recent sales nearby, a broker's opinion, or an appraiser's report. Some companies that handle IRAs have their own form and their own rules on what they accept, so ask before your asset's anniversary date comes around. If you're buying your first rental in an IRA, our plain-English guide walks through how that purchase works.
It matters most when money has to come out. Your required payout, called a required minimum distribution or RMD, starts from your IRA balance on December 31 of the year before. So the December 31, 2026 balance feeds your 2027 RMD.
RMDs start at age 73, or 75 if you were born in 1960 or later. Miss one and the excise tax is 25%, or 10% if you fix it in time. A value that's too low can shrink the payout you take, and that can leave you short. Our post on RMDs and alternative assets goes deeper.
A Roth IRA still gets a value every year, even though the owner has no RMDs. A Roth conversion is a separate moment. The amount you move is taxed for the year it leaves the Traditional IRA, so that value matters on the day it moves.
Here is how one owner might handle it.
Composite example for education. Not a real client. Not a recommendation.
Walt is 74. His Traditional IRA owns a rental house it bought in March and a private note it made in August. So Walt gets two FMV requests a year: one each March for the house, and one each August for the note. For the house, he pulls three recent sales from his street and writes down why his place is like them. For the note, he pulls the payment history and the unpaid balance. He signs each form, keeps a copy, and sends it in.
In January, Walt's year-end report shows both assets. He uses that balance to work out his RMD. Then he checks that his IRA has the cash to pay it.
Not sure what to gather for your own asset? Book a free consultation, and we'll walk through the paperwork. We can't tell you what your asset is worth, and we can't give tax advice, but we can show you how the process works.
Mountain West IRA can help you open a Self-Directed IRA or Solo 401(k), so you can invest in what you know best.
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If this topic sparked questions, reach out to our team. We are here to help you understand the rules, the process, and how self-directed retirement accounts work.
Not investment, tax, or legal advice. Check with your own financial advisor about your specific situation.
Sources:
Mountain West IRA approved process fact (Nov 2, 2026): FMV requested once a year, on the anniversary of each asset's purchase.
This post is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor for personalized advice.
Mountain West IRA, Inc. does not render tax, legal, accounting, investment, or other professional advice. If accounting, tax, legal, investment, or other similar expert assistance is required, the services of a competent professional should be sought.
A self-directed IRA allows you to choose from a broader range of allowable alternative assets, including real estate, promissory notes, precious metals, and more.
Mountain West IRA provides the administrative and recordkeeping services to support your account and process transactions at your direction.
