Foreign Assets Reporting

 

Form 8938:  Statement of Specified Foreign Financial Assets

 

U.S citizens, U.S. residents, and certain non-resident aliens that have an interest in specified foreign financial assets; and you meet the threshold reporting requirements below to file a tax return. Form 8938 Instructions.

 

Note: The U.S. dollar value of your foreign assets is calculated based on the exchange rate at the end of the calendar year, no matter when they were acquired or sold.

 

Living in the United States

 

Single or married filing separately

$50,000 on December 31st

$75,000 at any time during the calendar year

 

Married filing jointly

$100,000 on December 31st

$150,000 at any time during the calendar year

 

Living outside the United States

 

Single or married filing separately

$200,000 on December 31st

$300,000 at any time during the calendar year

 

Married filing jointly

$400,000 on December 31st

$600,000 at any time during the calendar year

 

Form 8938 is included with the federal tax return and is only required if you meet the threshold and a tax return is required to be filed.

 

Value to Report of Jointly Owned Assets for Form 8938:

 

   -  If you file a joint tax return, you must include the total value of all assets owned by you and spouse.

   -  If you jointly own assets with a spouse and you each file a U.S. tax return as married-separate, then the value of your jointly owned assets is one-half each.

   -  If you jointly own assets with a spouse who is non-resident (not required to file) and you file as married-separate or head of household, for reporting requirements, your value of the jointly owned assets is the total value of the assets.

   -  If you jointly own assets with a non-spouse, for reporting requirements, your value of the jointly owned assets is the total value of the assets.

 

Reportable Accounts & Assets

 

Foreign accounts and assets include, but are not limited to, the following accounts open at some point during the calendar year:

 

   -  Financial (deposit and custodial) accounts held at foreign financial institutions. This includes but is not limited to savings, checking, time deposits, and demand accounts. (FBAR & Form 8938).

   -  Shares in a mutual fund or similar pooled fund that is available to the general public. (FBAR & Form 8938).

   -  Foreign stock or securities held in a financial account at a foreign financial institution. This includes securities and brokerage accounts (including futures and options accounts).  The account itself is subject to reporting, but the contents of the account do not have to be separately reported. (FBAR & Form 8938).

   -  Foreign accounts held by foreign or domestic grantor trust for which you are the grantor.  (FBAR & Form 8938).

   -  Foreign-issued life insurance or annuity contract with a cash-value.  (FBAR & Form 8938).

   -  An interest in a foreign retirement plan or deferred compensation plan. (If you require Form 8938, this will be listed as an asset).  (FBAR & Form 8938).

   -  Financial account held at a foreign branch of a U.S. financial institution.  (FBAR only).

   -  Foreign financial account for which you have signature authority (subject to exceptions).  (FBAR only).

   -  Indirect interests in foreign financial assets through an entity if sufficient ownership or beneficial interest (i.e., a greater than 50 percent interest) in the entity.  (FBAR only).

   -  Foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor

   -  Foreign partnership interests

   -  Foreign stock or securities not held in a financial account (issued by a corporation).

   -  Foreign hedge funds and foreign private equity funds

   -  A note, bond or debenture issued by a foreign person.

   -  An interest rate swap, currency swap, basis swap, interest rate cap, interest rate floor, commodity swap, equity swap, equity index swap, credit default swap or similar agreement with a foreign counterparty.

   -  An option or other derivative instrument with respect to any of these examples or with respect to any currency or commodity that is entered into with a foreign counterparty or issuer.

   -  An interest in a foreign estate.

 

Exceptions to Reporting:

 

You do not have to report any asset on Form 8938 if you report it on one or more of the following forms that you timely file with the IRS for the same tax year.

 

   -  Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.

   -  Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations.

   -  Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.

   -  Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships.

   -  Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans.

 

Non-Reportable:

 

   -  Financial account held at a U.S. branch of a foreign financial institution

   -  Foreign real estate held directly (includes your personal residence and your rental properties)

   -  Foreign real estate held through a foreign entity. However, for Form 8938, the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate

   -  Domestic mutual fund investing in foreign stocks and securities

   -  Foreign currency held directly

   -  Precious Metals held directly

   -  Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles

   -  Social security, social insurance, or other similar program of a foreign government.

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