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Step-by-Step Guide: Generating Your Automated Fair Market Value Letters(FMV)

This article outlines the simple steps on how investors can download their FMV letters independently.

Understanding Fair Market Value (FMV) and FMV Letters

Fair Market Value (FMV) represents the current worth of an investment. In simple terms, it is the price at which an investor could sell their ownership stake to a willing buyer in an open market. FMV reflects the investment’s real-time value, taking into account factors such as total contributions and any returns of capital.

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 by end of a year by IRA custodians for compliance and contribution tracking. Investors can easily download their letters by sharing the following steps below. 

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

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 the offering.

      2. Add Your Authorized Signature

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  • Go to Settings > General and enter your full name at the bottom of the page.
  • 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 (FMV) 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 typically the end of a given year.

Step 3: Filter by profile names to find the relevant accounts, select all active and past investments to include in the FMV letter, and click Download FMV Letter. A PDF version of the letter will then be downloaded to your device.

You can also access the document(s) anytime under Documents > Miscellaneous. 

  Sample FMV letter for your reference

💡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.