It’s hard to believe that we're on the home stretch of 2018. We’ve already accomplished a great deal this year, but there’s still plenty to take care of before we turn the calendar. We recently announced our transition from New Direction IRA, Inc. to New Direction Trust Company, a process driven in no small part by the continued growth of our clientele. Nearly 17,500 accounts and over $2 billion in cash and assets under administration reflect the success of investor empowerment through self-directed retirement accounts, and for that we’re extremely proud to be part of your financial team.
That being said, a trust charter doesn’t include a license to neglect the day-to-day practices that brought us this far. While we seek to move our company forward and introduce beneficial new initiatives, we are also committed to maintaining stability and efficiency. Our office in Louisville, CO, our personnel, our contact information, your fees...none of these will change as a result of becoming New Direction Trust Company.
In the spirit of “business excellence as usual”, we’d like to remind you that it’s never too early to start planning for end-of-year considerations related to your self-directed IRAs and your alternative IRA investments. New Direction Trust Company, as always, is standing by to help address the following year-end matters if they apply to you:
As your IRA custodian, New Direction Trust Company is required to report the value of your account to the IRS every year. Unlike stocks and mutual funds, alternative assets like real estate and private equity positions don’t bear consistent and widely acknowledged fair market values. As such, you must obtain a fair market valuation of assets in your account from a qualified third-party individual or entity. You must also submit valid supporting documentation.
We request fair market value information prior to December 31 so that your Form 5498 (the official tax document on which the value of your account is reported) accurately reflects the status of your self-directed IRA. Precious metals investors are not required to utilize a third-party service for fair market valuations; New Direction Trust Company will report those values on your behalf, as physical gold, silver, platinum, and palladium all hold generally accepted market values (spot prices).
If you’re at least 70 ½ years old and hold a pre-tax account such as a Traditional IRA, SEP IRA, or SIMPLE IRA, you have until December 31 to take a required minimum distribution (RMD). Your account balance as of December 31, the previous year (which appeared on your most recent Form 5498) and your age will factor into the RMD calculation. Other circumstances may affect the calculation as well, so please consult with your CPA or tax professional for additional assistance.
For those of you who turned or will turn 70 ½ this year, you have an extended deadline of April 1, 2019 to make your initial withdrawal for the 2018 tax year. All subsequent RMDs will have to be taken by the December 31 deadline, including an additional distribution for the 2019 tax year (on or before December 31, 2019).
Keep in mind that you may distribute IRA assets in kind. For instance, if your self-directed account holds precious metals and you would rather not liquidate your coins or bullion, you may distribute the physical items themselves. The IRS doesn’t care about the exact nature of your withdrawal as long as the collective spot price of the distributed items satisfies your required minimum.
Waiting until the last minute to handle these transactions can lead to undue stress when you may rather be enjoying the holidays. For more information or to request assistance from one of our client relations specialists, please don’t hesitate to call our office at 877-742-1270 or send us an e-mail at firstname.lastname@example.org.
Catherine Wynne & Bill Humphrey