Every IRA must report its year-end value to the IRS annually. Your custodian handles the filing, but for a checkbook IRA, you are responsible for providing the numbers.
Form 5498 is an informational return filed by your IRA custodian each year. It reports the total value of your IRA as of December 31, along with any contributions, rollovers, or conversions that occurred during the year.
For a conventional IRA invested in publicly traded securities, the custodian can look up account values directly. For a checkbook IRA, the custodian holds the IRA but has no visibility into the LLC or trust. You must provide the year-end value of the entity so the custodian can complete the filing.
The value you report is the total of all assets held within the LLC or trust as of December 31, plus any cash in the entity bank account. The sum of those figures is the value your custodian needs.
For example: if the LLC holds a private loan with a balance of $80,000 and has $12,000 in cash, the reported entity value is $92,000.
Valuation is due in early January each year. Your IRA custodian will communicate the specific deadline to you annually.
Mark this deadline on your calendar each year. Late reporting can result in custodial fees, and repeated failures to report can put your account in jeopardy.
Some assets require more lead time to value than others. If your plan holds real estate or other assets that require a professional appraisal, do not wait until January to start that process.
For real estate and similar assets that do not change value daily, an appraisal completed within the last 60 days of the calendar year is generally acceptable for year-end reporting. That means you can have an appraisal in hand by late November or December and use it for your December 31 reporting obligation.
If your plan holds assets that require valuation letters from sponsors, certifications from licensed professionals, or other third-party documentation, begin requesting those in November. Last-minute requests risk missing the reporting deadline.
Annual reporting is not the only trigger. If a taxable event occurs during the year, a current valuation is required at the time of that event. The most common situations are a Roth conversion, an in-kind distribution, or a Required Minimum Distribution calculation.
For guidance on how to determine the value of specific asset types, see the related article on asset valuation.
Do I ever receive a copy of Form 5498?
Yes. Your custodian sends you a copy of Form 5498 each year, typically in May after the IRS filing deadline. It is an informational document only. No action is required on your part when you receive it, but you should retain it with your plan records.
What if I fail to report valuation?
Your custodian may assess late fees for missing the reporting deadline. If valuation goes unreported across multiple years, the custodian may resign as custodian of your account. Maintaining an active, compliant account is your responsibility as the account holder.
Does this requirement apply to Roth IRAs as well?
Yes. Form 5498 is required for all IRA types, including Roth IRAs. The reporting process is the same regardless of whether the account is tax-deferred or tax-free.
This information is provided for educational purposes only and should not be interpreted as tax, legal, or investment advice. Readers are encouraged to consult a qualified professional who can offer guidance based on their personal situation.