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Investor Insights Blog|Why does Equity Trust Company Require a Fair Market Valuation (FMV)?

Managing Your Account

Why does Equity Trust Company Require a Fair Market Valuation (FMV)?

As a custodian, Equity Trust Company is required to report taxable events to the IRS. An up-to-date asset value is required at the time of reporting. Therefore, we request account holders provide an updated value for their assets: on an annual basis, as well as at the time of a taxable event.

Examples of taxable events include:

  • Personal distributions
  • Roth conversions
  • Recharacterizations
  • Required Minimum Distributions (RMD)
  • Transfers of assets through inheritance from an account to the inheriting beneficiary

While not a taxable event, Annual Maintenance Fees are calculated based on the total account value at year end. Accurate, up to date asset values at year end are necessary for correctly assessing the account’s Annual Maintenance Fee.

The fair market valuation form needs to be completed by the account holder and may also require a qualified, independent third party to complete the form. The valuator cannot be related to the account owner and they must be specifically qualified for assessing the value of that asset.

Some possible options for who can conduct or provide an asset valuation:

  • A Realtor, appraiser, or real estate investment professional
  • A managing member of an entity company or another authorized signer
  • An independent CPA, attorney or other knowledgeable third party

Clients can submit fair market valuation documents through the account management system myEQUITY (Manage > Update Asset Value).

If you need any assistance, contact Equity Trust Company at 888-382-4727.


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