Yearly Appraisal/Valuation of IRA Assets Needed?

[Daniel Dietz]

Hello,

I just received a notice from my SDIRA provider that I need to to do a 'yearly valuation' of my SDIRA Assets. I had never heard of this before. I will copy some of the terminology below.

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We are sending you this notice that your Roth account is required to provide an annual valuation for the end of 2013. Your account holds assets whose values are not readily obtainable without some sort of fair market valuation or appraisal.

and

Below is a list of the asset(s) that we currently show in your account along with the last known value. Please write in the year end value next to each item. This reporting must be completed by 1/14/2014. Please refer to the attached PDF document for more information on providing asset valuations.

and

If the IRA holds any of these type of assets, then the following steps must be followed in order to insure IRS compliance for establishing fair market value:
a) Obtain fair market valuation of the assets by a qualified independent expert for that asset type or category. For example, if the asset is real estate, then a qualified real estate appraiser must by hired to provide the valuation.
i) Fair market value is generally defined by receiving a formal appraisal of the assets from a qualified, independent appraiser for the type of asset(s) held in the account.
ii) A qualified appraiser is generally someone that is trained and certified in the specific asset class in question.
iii) Appraisals should be timely. This means that the appraisal provided for updating your assets should be completed and delivered within 1-4 weeks of the completion.
NOTE: You, the account holder or your spouse, would not be considered to be independent

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Have any of you ever heard of this? I have never read about it even here on BP, and I figured if YOU all had not talked about it, then it doesn't exist! ;-).

One of the things I wondered is if

1) the tax appraisal could work? In our area they are close to market value, and actually carry a 'factor' such as 'this appraisal is at 93% of market value' or such.

2)Since we only bought the porperty a few months ago, does not the sale price establish the 'true value'?

Thoughts please!

Thanks, Dan Dietz