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Automated Fair Market Value Letter (FMV)

This article outlines the simple steps investors take to download their FMV letters independently.

Understanding Fair Market Value (FMV) and FMV Letters

A Fair Market Value Letter is an official document that provides an annual valuation of an investor's holdings, stating the Fair Market Value (FMV) as of a specific date. These letters are often required by IRA custodians for tax reporting, financial planning, and compliance purposes, ensuring investors have a clear and accurate record of their investment value at year-end

Who Needs an FMV Letter?

FMV letters are generally requested at the beginning of each year by IRA custodians for compliance purposes. Investors can easily download their letters by following the steps below. 

Note: Most IRA custodians request FMV letters annually, but Equity Trust requests FMV letters only when investment values change, reducing admin effort.

Key Steps for Sponsors to Complete

The Fair Market Value (FMV) calculation is automated based on each investor’s contributions and total return of capital for a selected period. However, to generate a complete FMV Letter for investors, sponsors need to complete the following steps:

  1. Enter the Price Per Unit for Each Offering 

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  • Navigate to Portfolio > The Offering > Offering Details > The Offering Information.

  • Add the Price Per Unit for each investor class. This is the original price paid per unit, not today's value.

      2. Add the Manager Name to Be Listed on the Letter

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  • Go to Settings > General and enter the Manager Name under the Automate Fair Market Value Letters section.
  • This will automatically generate your signature, which will appear on the FMV Letter. You can also preview a sample letter for reference.

Steps for Investors to Download Their Fair Market Value Letters

Investors can follow these steps to download their FMV letters:

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Step 1: Navigate to Documents > Tax Documents > Download FMV Letter. 

Step 2: A pop-up will appear, allowing investors to select the valuation date, which is always the last day of the year.

Step 3: Select the investments to include in the letter and click Download FMV Letter. A PDF version of the letter will then be downloaded, and a copy of the letter will automatically be stored under Documents > Miscellaneous for future reference.

Here is a Sample FMV letter:

💡Investors can retrieve and download FMV letters for up to the past three years.

👤 For questions or help with the process, email us at success@sponsorcloud.io or Schedule a meeting. An experienced Customer Success Manager will reach out to assist you.