How do I report the Fair Market Value (FMV) of my IRA investments? (IRS Form 5498)

If your assets do not change in valuation frequently, feel free to start ASAP. For assets that trade on live exchanges or daily, please wait until January 1st before entering a final value as of December 31st, as markets will change the value of your IRA.

Step 1: Add all new investments and any missing investments for the year (instructions below).

Step 2: Update the Fair Market value of existing investments to their current value as of December 31st, (instructions below).

Step 3: If necessary, email support@rocketdollar.com with the subject FMV [FIRST NAME] [LAST NAME] for each investment that needs to be deleted, or a correction made to its asset type, initial investment date, or initial investment amount.

If your cash balance doesn’t seem accurate, please send us a note. We are working directly with our custodian partners to update your cash balance and are currently working on integrations to improve this experience for real-time updates. Please DO include any cash-like instruments in the investment tracker, or cash held away from your bank account in the name of the IRA LLC or Solo 401(k).

Why have I never heard of this?

Form 5498 is reported for every IRA retirement account in the United States. When it comes to stocks and bonds, the price tracking structure of those assets has decades of infrastructure so that your investment providers can file it automatically. If you look closely at your mail and digital inboxes during tax time, you might see your stocks and bonds IRA providers sending you a copy of a Form 5498.

When it comes to private assets, Rocket Dollar needs a little help from you to make sure it is reported accurately. Rocket Dollar wants to continue to make it easier to value private assets. You do not need to file form 5498, as your IRA custodian will submit it to the IRS.

How do I add a new investment and report my Fair Market Value at Rocket Dollar?

Please follow the instructions step-by-step along with the screenshots provided.

• 1. Login to your Rocket Dollar Dashboard. 

     If you do not need to add a new investment and just update your FMV of older investments, please skip to Step 5 after logging into your dashboard.

  2. On the left-hand side, open the Invest () section of your dashboard, and select NEW INVESTMENT at the bottom.

  3. Enter your Investment Details.

     For Wire Info: If you are just entering an older investment for the sake of FMV, Wire information is unimportant. You can enter a 1 into each box. An update on December 14th will make the wiring information optional. 

  4. Click on the NEXT button. Your Investment has now been submitted, and repeat as many times as needed for new investments.

  5. To update your Fair Market Value, go to the Home () section of your dashboard and click on your IRA Account (), and then the Investments section.

  6. Next, click on the Investments section to view the value of each of your investments.

  7. Then, update your market value by clicking on an investment and entering the current market value. Please do this for each investment.

  8. Click the three-dot icon () on the right of an investment to view the percentage change in gain/loss and edit the fair market value if needed.

  9. Review the Fair Market Value of your investments, then click CONFIRM & SUBMIT.

  10. Your Fair Market value has been updated!

      AET Direct Custody IRA Account owners will also need to complete American Estate & Trust (AET)’s Valuation form, which our support team will send out once you update the Investment Tracker on your dashboard.

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Do I need to report the IRS Form 5498 on my taxes?

NO. Reporting IRS Form 5498 on your own taxes is a duplication of efforts as it is already submitted by your IRA custodian.

Your custodian submits Form 5498 to the IRS and provides you with a copy for your records.

AET will provide a copy of the 5498 on request after you have signed the AET valuation form. Expect to receive it after you finish your FMV report.

If your IRA must pay UBIT taxes, see here.

What if I'm using American Estate & Trust (AET) as a custodian?

Once you update the investment tracker, our support team will send you AET’s Valuation form via email to complete, along with further instructions to complete your Fair Market Value update.

What if I'm using Digital Trust as a custodian?

Stand by for details in the coming weeks. Those at Digital Trust have more time to complete their FMV, and details will be coming in late December and early January.

Fair Market Value FAQs

• You have two ways you can represent this in the investment tracker.

  1. Put in one entry for your entire wallet and ALL the crypto held within. This should equate to the USD value as of December 31st; OR
  2. Put each asset on a separate investment line, what you started with, and what you held as of December 31st,

  Jeff opened a Rocket Dollar IRA to invest in cryptocurrency.

  1. Jeff moved $22,000 of retirement cash to his IRA bank account when he started his IRA.
  2. He then purchased a hardware device with his IRA debit card and some security measures. The cost was $400. This money is now “gone” from Jeff's retirement account and is irrelevant to FMV, just like a person who buys a real estate property and then pays $400 to a property manager.
  3. Jeff moved $21,600 of Cash into Gemini when he started his account. ETH was priced at $3,000 at the time.
  4. Jeff then had 7.2 ETH on Gemini.
  5. After transaction and gas fees, Jeff sees he now has 7 ETH in a ledger wallet in his retirement account.
  6. Jeff goes on the website trading view and looks for the price of ETH. Jeff used the Coinbase tracker price as that's a solid market price for ETH and almost always the same as Gemini.
  7. He finds the price tick of midnight December 31st (Sun 01 Jan '23 00:00) in USD value: $1195.31.
  8. Jeff has used an Excel sheet or calculator to calculate 7 x $1195.31 = $8367.17. Jeff does not multiply by 7.2 because that is a past value that is no longer relevant to 2023's Fair Market Value.
  9. Jeff repeats this for ALL different crypto assets inside my crypto wallets.
  10. Jeff enters these into his Rocket Dollar investment tracker. Some users segregate for each crypto asset they own (meaning a starting and end-year value for Polygon, ETH, BTC, and Solana) and some users just submit one submission like ETH WALLET with all of them added together for simplicity.

• If your cash balance doesn’t seem accurate, don’t worry! we are working directly with our custodians to update your cash balance and are currently working on integrations to improve this experience. Make sure to report cash-like instruments that might be held away from your IRA bank account if you are an IRA LLC or Solo 401(k) Investor. This could be treasuries, CDs, etc.

• The IRS requires that Form 5498 be filed annually for every Individual Retirement Account (IRA). Form 5498 provides information to the IRS about contributions made to the IRA along with the Fair Market Value (FMV) of the IRA Plan.

• No. Filing Form 5498 to the IRS is an annual requirement for all IRA accounts in America. All of your custodians of stocks and bonds send these off automatically as the value of your assets in those accounts is easier to determine. Since you are the asset manager of your self-directed IRA, you must provide our custodian partner with the value of the assets held in your IRA. These records are your responsibility to maintain. If you refuse to report accurate information, Rocket Dollar still has to send a value to the IRS for all IRAs.

• No. You should submit the total value of the assets held in your LLC, which your IRA owns. If you have any cash in your IRA account that has not been invested in your LLC or Solo 401(k), we will add that cash balance to the value you provide us and include the total value on Form 5498.

• You, as the manager of the LLC or trustee of the Trust, are responsible for providing an accurate fair market value to your custodian. Your custodian is responsible for submitting that information to the IRS annually. If a customer is not cooperating, your IRA may be closed and distributed for noncompliance. If you were to come under audit, and your FMV was not reflective of the value of your investments and the cash balance of your IRA from year to year, that could lead to further issues under audit.

• Rocket Dollar's custodian partners typically do not request a 3rd party valuation. You, as the IRA account holder, or as the manager of the LLC or trustee of the Trust, will be responsible for substantiating your FMV should the IRS request such documentation. Therefore, each person must make their own determination of the difficulty of assessing the fair value of the underlying assets within their LLC/Trust and then determine if third-party assistance is necessary or warranted.

  • A recent statement of value
  • A recent valuation price, times the number of shares or interest your retirement account owns
  • an and-of-year statement, or K1
  • A realtor's or real estate professional valuation analysis
  • A live market price at midnight December 31st or at the close of a market, if your asset is live traded (crypto, some public markets securities)

• No, only the values of the investments do. Rocket Dollar does not share any investment tracker data on Form 5498. If the IRS were to audit you because FMV was not reported accurately or consistently, then the IRS could ask you to share investment records. Presenting those records would then be necessary to comply.

• For all IRA Clients: If you also have a Solo 401(k), focus only on your IRAs for now. Rocket Dollar requires Solo 401(k) clients to fill out their investment trackers by February 28th.

• Failure to complete the FMV report can mean an outdated value of your IRA will be submitted to the IRS. Inaccurate reporting could result in penalties dictated by the IRS.

• Please refer to Internal Revenue Code, Department of Treasury Regulations § 25.2512-1 through § 25.2512-6. 

• Any questions about valuations should be directed to your CPA, tax attorney, or financial advisor. Rocket Dollar has a CPA and Lawyer that we can introduce you to, and can provide basic education, but cannot assist you directly in valuing your asset. Contact us at info@rocketdollar.com to be introduced to a CPA or lawyer.

• Customers who have a direct custody IRA will typically need to submit a professional evaluation just before or after the end of the year to support their FMV value. IRA LLC or Trust clients can use the suggested platform of REDFIN data but may be asked to provide a professional evaluation or brokers opinion letter confirming the value in special circumstances, such as RMDs for those over 70, or other distributions.