The short answer is that the account holder is responsible for providing FMV, not the custodian.
Understanding this distinction helps avoid confusion, delays, and frustration during the annual reporting process.
The Difference Between a Custodian and an Account Holder
A self directed IRA custodian is responsible for:
- Holding assets in a tax advantaged account
- Processing transactions as directed
- Maintaining IRS required records
- Reporting information based on what is provided
The account holder is responsible for:
- Directing investments
- Obtaining Fair Market Value for those investments
- Submitting FMV and supporting documentation
Because custodians do not manage or control the assets, they are not in a position to determine their value.
Why Custodians Cannot Guess FMV
Custodians must remain neutral and cannot independently value assets. Guessing or estimating FMV would create compliance risks and inconsistencies across accounts.
For many alternative assets:
- There is no public market price
- The custodian does not receive performance updates
- Asset values depend on sponsor or borrower information
For this reason, FMV must come from the account holder or a qualified third party.
MidAtlantic IRA reports FMV exactly as submitted by the client and does not verify or reinterpret valuation data.
How Client Provided FMV Is Used
Once FMV and documentation are submitted, MidAtlantic IRA uses that information to:
- Update the account’s year end value
- Complete required IRS reporting
- Support future calculations such as Required Minimum Distributions
If information is missing or unclear, the team may request clarification, but they cannot substitute or create values on a client’s behalf.
Why This Structure Protects You
This process exists to protect both the account holder and the custodian. It ensures that:
- Values are reported consistently
- Custodians remain compliant and neutral
- Investors retain control over their investment information
Clear responsibility reduces errors and keeps the account in good standing.
The Takeaway
FMV responsibility rests with the account holder because they are closest to the investment and its performance. While custodians support the reporting process, they cannot determine or assume values.
Once this expectation is clear, FMV reporting becomes a much smoother and more predictable part of account maintenance.