This yearly update ensures retirement accounts remain accurately reported and compliant.
The Annual FMV Requirement
FMV is reported on a calendar year basis. Each year, your account must reflect a reasonable estimate of its value as of the end of the year.
This applies regardless of:
- Whether the asset produced income
- Whether the value increased or decreased
- Whether any transactions occurred during the year
Even if nothing changed operationally, FMV still needs to be provided.
Valuation Date vs Submission Deadline
One of the most common points of confusion is the difference between the valuation date and the submission deadline.
- Valuation date: December 31
This is the date the Fair Market Value should reflect. - Submission deadline: The custodian’s stated deadline, which allows time for processing and IRS reporting.
Although FMV reflects the value as of December 31, it is typically submitted in the weeks following year end. Meeting the custodian’s deadline is important to ensure accurate reporting and avoid delays.
What Happens If FMV Is Missing or Late?
When FMV is not submitted on time, it can create issues beyond simple paperwork delays.
Missing or late FMV may:
- Delay IRS reporting for the account
- Impact Required Minimum Distribution calculations
- Limit account transactions until corrected
- Require follow up documentation or corrections
Because FMV is used as a reference point for the following year, delays can affect more than just the current reporting cycle.
Why Consistency Matters
Submitting FMV consistently each year reduces stress, follow ups, and last minute issues. It also allows your custodian to maintain clean records and helps your tax professional work with accurate information.
Treating FMV as a recurring annual task rather than a one time event makes the process much easier to manage over time.