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Form 5498 is a simple tax form that’s typically issued after tax day. This document describes:
- The fair market valuation of your account
- Any contributions you made in the previous tax year
- The type of asset(s) your account held.
NDTCO generates Form 5498s once a given tax year is over. We send one copy to you for your records and issue another copy to the IRS to satisfy our annual reporting requirements.
Want to keep an eye on your tax-advantaged account? Log in to the Client Portal.
Fair Market Valuation of Assets in your Account
By law, NDTCO must report a fair market value (FMV) for every account under our administration once per year. Form 5498 communicates this value to the IRS. As such, self-directed investors must obtain FMVs from qualified individuals or entities that specialize in their particular asset types. For example, a certified real estate appraiser could provide an FMV for an IRA-owned property. Precious metals investors—whose assets bear broadly accepted and readily available market values (spot prices)—are under no obligation to elicit the services of a third party for FMV purposes.
You must submit FMV information to our office no later than December 31. This will help ensure accurate information on your annual account statements and Form 5498s.
Contribution Activities
Your Form 5498 will also describe any IRA contributions made during the prior tax year. These include rollover contributions, for which you should have received a corresponding Form 1099 from your resigning custodian. If, for instance, you rolled funds from a 401(k) to a Traditional IRA, your 401(k) administrator would report the distribution via Form 1099 and New Direction Trust Company would report the subsequent contribution via Form 5498. By reporting the offsetting amounts, you can be confident that the IRS won’t collect taxes on the cash or assets that left your 401(k). Form 5498 will affirm that those holdings arrived in another qualified account within 60 days and are therefore not taxable.
If you executed an IRA-to-IRA transfer in a given tax year, the transaction will not be reported as a rollover and will be excluded from your Form 5498 accordingly (apart from any transferred sums that contribute to the overall FMV of your account).
Held Assets
2017 marked the first tax year in which the specific asset class of your self-directed investment was reported on your Form 5498. A code in Box 15b. will provide this information (i.e. Code “D” indicates “Real Estate” as of 2019). Please review the official instructions provided by the IRS for a full list of these codes.
For more information about how your alternative IRA investments will be represented on your Form 5498, feel free to send us a message through the Client Portal or give us a call at 877-742-1270.
