2011 Filing Thresholds for Form 8938 regarding Foreign Assets 

    New for the 2011 filing season is the requirement of IRC Section 6038D that individuals must report information on Form 8938, Statement of Specified Foreign Financial Assets, as part of their income tax return with respect to specified foreign financial assets.  Examples of some of the assets that may require reporting on Form 8938 include:  non-U.S. financial accounts (deposit accounts and mutual funds), non-U.S. retirement accounts such as pensions, and direct ownership in a non-U.S. corporation or partnership.

    Many taxpayers and tax practitioners need to be aware of these rules and this new reporting requirement.  Also keep in mind that this new reporting requirement is separate from (and does not replace) the foreign bank and financial account report on Form TD F 90-22.1 (commonly referred to as FBAR).

    The statute generally provides that the obligation to report foreign accounts and assets is triggered when the aggregate value of such assets during the calendar year exceeds $50,000.  However, based on statutory authority giving Treasury and the IRS authority to raise those thresholds, the temporary regulations issued December 14, 2011 provide that the filing requirement will be triggered based on the following thresholds:


    Aggregate value of all specified foreign financial assets on last day of the tax year is more than:

    OR at any time during the tax year is more than:

    Unmarried taxpayers living in the U.S. 



    Married taxpayers filing a joint return and living in the U.S.



    Married taxpayers filing separate returns and living in the U.S.



    Unmarried taxpayers living abroad



    Married taxpayers filing a joint return and living abroad



    Married taxpayers filing separate returns and living abroad



    In the case of jointly held assets, a joint owner often will need to consider and include the entire value of the interest on Form 8938.  Only a limited population of married taxpayers will be able to consider their share of a jointly-owned asset.  

    Similar reporting for certain business entities, trusts and estates do not apply for 2011.  However, proposed regulations may expand reporting beyond individuals in future years.

    For more information regarding this new reporting requirement, see New for 2011 - Informational Reporting Required of Specified Foreign Assets, the temporary regulations under IRC Section 6038D, and the proposed regulations.

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