How does one come up with the value of a note at the end of the year (for tax purposes or for an IRA administrator)? It’s not the UPB for the original note, since I didn’t pay UPB so that price would contain “unrealized gain”. Could I use the amortization schedule based on my price and the number of payments I bought? Or is it something else?
<span style=”font-size: 11.0pt; font-family: ‘Calibri’,’sans-serif’; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: ‘Times New Roman’; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;”>Rev. Rul. 67-276, 1967-2 CB 321, IRC Sec(s). 2031 says that the fair market value of notes, secured or unsecured, is presumed to be the amount of unpaid principal, plus accrued interest to the date of the gift, unless the donor establishes a lower value. Unless returned at face value, plus accrued interest, it must be shown by satisfactory evidence that the note is worth less than the unpaid amount (because of the interest rate, or date of maturity, or other cause), or that the note is non-collectable in part (by reason of the insolvency of the party or parties liable, or for other cause), and that the property, if any, pledged or mortgaged as security is insufficient to satisfy it.</span>
