Tuesday, April 10, 2012

Form 8938, Statement of Specified Foreign Assets | Bellevue Tax Lawyer

As the 2011 tax return filing deadline is quickly approaching, and the majority of my readers seem to have foreign assets, I wanted to make a quick post about the new IRS form 8938.  If you are a US person for tax purposes, form 8938 is required to be filed with your tax return when your specified foreign financial assets are in excess of the threshold.  This form is filed in addition to the FBAR and is duplicative of a lot of the information reported on the FBAR.  I won't get into the specifics of the form but will give a quick rundown of some of the details.

Specified foreign financial assets include: 
(1) any interest in a financial account maintained by a foreign financial institution.  This includes bank accounts, brokerage accounts, life insurance, annuities, and financial instruments, among other things.  
(2) Any interest in a foreign entity that is not held in a foreign financial account.  This includes stocks and securities not held in a foreign financial account, and any interest in a foreign entity not held in a foreign financial account.  A foreign entity is a foreign business such as a partnership, LLC, corporation, trust, etc...  Foreign real property does not have to be included if it is not held by a foreign entity.  This list is provided to give you an idea of what is a specified foreign asset and is not all inclusive.

The thresholds for filing are listed in the instructions for the form.  The reporting requirements begin at $50,000 for a single person living in the US.  If the value of your specified foreign financial assets exceed this please take a look at the instructions and see if you have a filing requirement or contact a tax professional to help you determine if you are required to file this form.  

In addition to reporting the assets, form 8938 also requires a taxpayer to list any tax items related to the foreign assets by form, schedule, and line number.

The instructions for Form 8938 can be found here, and Form 8938 can be found here.  

If you have any questions please contact me directly or leave a comment.

As with everything related to the IRS, it is difficult to provide comprehensive information related to taxes and tax law on the web.  Please do not rely on this article without consulting a tax professional.

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