What is IRS Letter 5498?

IRS Letter 5498 is not a notice from the IRS but a form your IRA custodian sends to both you and the IRS. It reports contributions, rollovers, and the fair market value of your IRA or retirement account. Although it doesn’t require action, it’s essential to keep it for your tax records - especially if you made contributions or rollovers during the tax year.

White envelope stamped in red with text ‘IRS Letter 5498 – Important: IRS Notice Enclosed.’

What is IRS Letter 5498?

White envelope stamped in red with text ‘IRS Letter 5498 – Important: IRS Notice Enclosed.

IRS Letter 5498 is not a notice from the IRS but a form your IRA custodian sends to both you and the IRS. It reports contributions, rollovers, and the fair market value of your IRA or retirement account. Although it doesn’t require action, it’s essential to keep it for your tax records - especially if you made contributions or rollovers during the tax year.

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Why is IRS Letter 5498 important for crypto holders?

If you've moved crypto-related funds through a self-directed IRA (SDIRA), this form confirms tax treatment. Mistakes here could trigger red flags with the IRS.

What to do next:

1: Double-check your records match what’s been reported

2: Keep it with your tax files; you may need it in an audit

3: If the numbers look wrong, contact your IRA provider immediately

When to Seek Professional Help

CryptoTaxAudit helps investors properly report self-directed IRAs holding crypto and avoid penalties from misreported contributions.

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Additional Resources

Voluntary compliance letters