Can I invest in real estate, partnerships, collectibles and other non-traded assets?
Qualified Plans must provide for at least annual valuation of investments held by the trust in accordance with a method consistently followed and uniformly applied. Fair Market Value (FMV) must be used for this purpose. The kinds of assets typically affected by these rules are limited partnerships, interests in closely-held, non-publicly-traded corporations, real estate, and collectibles. Carrying such an asset at cost or, in the case of a partnership, using the capital account shown on the Schedule K-1 is not FMV. The determination of FMV must be in accordance with Revenue Ruling 59-60 standards. These are the same standards as are used for estate valuations. Valuation must be performed by an independent appraiser who uses the appropriate research and analysis and prepares an appraisal report which meets these standards. Assets which are improperly valued can give rise not only to a violation of the regulations, but also to trustee liability for undervaluation or overvaluation of the
