Annual Work For You
When To Restructure Your Plan
Get Valuations On Those LLCs And Real Estate
Watch Out For These Rules/Pitfalls

Get Valuations on Those LLCs and Real Estate

  1. If my retirement plan owns real estate in the retirement plan, or other assets that do not have a fair market value that is published every day, what does my retirement plan need to do to get fair market valuations?
  2. Suppose my plan owns a part of one or more LLCs, or LLPs, what do I need to do to get fair market valuations?
  3. Suppose my plan owns gold or another precious metal, or artwork, what do I need to do to get fair market valuations?
  • The answer to all of these questions is that you, as trustee for the retirement plan, need to get fair market valuations done by a reputable and qualified source, on a periodic basis; this means getting a fair market value on that real estate, from a recognized appraiser using recognized appraisal standards and procedures, showing the fair market net value of the property – for example if the property is determined by the appraiser to have a fair market value of $600,000, and you have a mortgage on it of $150,000, then the fair market value you need to report is $450,000 on the trust balances form, and keep the backup available.

  • Sometimes it can be tough finding a qualified party to get a fair market value of an LLC; this is especially true of the LLC is in process of foreclosure; nevertheless, you are required to get a fair market value appraisal, and we need you to tell us what that value is, so we can use it for your annual work.

  • If your plan has participants in it who are not owners of the company, and the plan owns assets that do not have a published daily fair market value, then you will need to obtain an “annual examination and report by an independent public accountant” performed each year for your retirement plan, to satisfy legal requirements.
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