Form 1099-R is issued by the IRS and is part of a series of forms called “information returns.” The form is used to report distributions from annuities, retirement plans, profit-sharing plans, IRAs, insurance contracts, and/or pensions. In addition to reporting retirement plans, 1099-Rs are used to report other sources of income besides salaries, including interest and dividends and independent contractor income.

IRS Form 5498 is used by those who have an individual retirement account (IRA). The form contains information about IRA contributions, rollovers, Roth IRA conversions, and required minimum distributions (RMDs), and is issued by financial institutions who are required to share return information to the IRS and IRA participants each year.

The Purpose

The IRS requires all IRA assets to be valued annually at their fair market value. Stocks and traditional investments are easy to value because their price is determined by the market. On the contrary, some assets are difficult to price and still need to be reported at fair market value. Hard-to-value investments may include non-publicly traded stock, partnership interests, real estate, etc.

Trigger Events

  • IRAs
  • Charitable gift annuities
  • Profit sharing
  • Insurance contracts
  • Pensions

Scalar’s Services

To avoid a severe tax penalty, the IRS suggests having an independent third-party valuation firm like Scalar to complete a formal valuation opinion of any hard-to-value assets or securities. Scalar’s team of valuation specialists has experience working on an extensive range of hard-to-value assets for clients from all industries and stages of development.