Where to Disclose? Form 8938 and/or FBAR? - 2011 Filings 

    Published January 19, 2012

    Update to original article March 28, 2012:  The table below has not been updated for information learned from IRS guests on AICPA's March 20, 2012 infocast.  Readers of this article may also be interested in IRS's Comparison of Form 8938 and FBAR Requirements, posted by the IRS on March 26, 2012.


    This table helps one identify which foreign financial assets and accounts must be disclosed for 2011 on:
    1. Form 8938, Statement of Specified Foreign Financial Assets;
    2. Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (commonly referred to as FBAR); or, both.

    The table is based on information and guidance available as of January 19, 2012.


     

     On Form 89381, 3

     On Form TD F 90-22.1 (FBAR)2, 3

     

     (Required by Title 26 - Internal Revenue Code)

    (Required by Title 31 - Bank Secrecy Act) 

    Where and when to file?

     Filed with Form 1040 (by April 15th, or extended due date) to IRS

    Received by FinCEN (a separate agency under the Department of the Treasury) no later than June 30th 

    Who must file?

     Individuals4

     Individuals, estates, trusts, U.S. business entities of all types, including disregarded entities

    Minimum filing threshold

     $50,0005

     $10,000

    Penalties and consequences for not filing

     Civil:  Up to $10,000 for each 30 days of non-filing, plus others; criminal penalties may also apply.  Statute of limitations on the entire income tax return could remain open until three years after the failure is remedied.

    Civil:  Up to the greater of $100,000 or 50% of account balance in year of violation, plus others; criminal penalties may also apply 

    Examples of types of financial accounts and assets to be disclosed:    
    Financial accounts owned by the individual and maintained at a foreign financial institution, including deposit accounts and mutual funds

     Yes

    Yes 

    Financial accounts maintained at a foreign financial institution over which the individual has signature authority or control, but no financial interest

     No

     Yes

    Foreign retirement accounts, such as a pension or IRA equivalent6

     Yes

     Yes, for some

    Direct ownership of stock in a foreign corporation (not held in an account maintained by a financial institution)

     Yes

    No 

    Foreign partnership interests, such as foreign hedge funds and foreign private equity funds

     Yes

     No

    Foreign-issued life insurance products with a cash value

     Yes

     Yes

    Foreign-issued annuity contracts

     Yes

     Yes

    Interests in foreign financial assets with joint ownership

     Yes, each joint owner must report separately

     Yes, each joint owner must report separately

     Undeveloped land - direct interest7

     No

     No

     Real estate - direct interest7

     No

     No

    Personal property such as art, jewelry or car

     No

     No

    Gold and other precious metals - bullion, certificates, ETF

     Yes

    Yes 

    Interests in foreign financial assets through constructive ownership situations:    
          Reportable assets and accounts of a disregarded entity

     Yes

    Yes

          Reportable assets and accounts of a foreign corporation or foreign partnership

     Partly No8

     Yes, if own more than 50% of the entity


    1  The data presented in this table is based on statutory language and final instructions to final Form 8938 for 2011, as well as temporary regulations currently in effect under Internal Revenue Code section 6038D.
    2  Form TD F 90-22.1 is required of U.S. persons who have ownership, signature authority (alone or in conjunction with another individual) to control the disposition of assets.
    3  Accounts and assets in possessions and territories such as Puerto Rico and U.S. Virgin Islands are deemed foreign for purposes of Form 8938, but are not considered foreign for purposes of FBAR.  However, if you live in the possession as a bona fide resident, the account there is not foreign.
    4  For 2011, Form 8938 is only required to be filed by individuals.  Per Prop. Reg. § 1.6038D-6, the reporting of specified foreign financial assets will also be required of specified domestic entities in future years.
    5  The threshold applies to the aggregate value of all affected assets, as of December 31.  It ranges from $50,000 for a single taxpayer living in the U.S. to $400,000 for couples filing jointly who live abroad.  There are higher thresholds for intrayear asset values.  Thus, even though aggregate account(s) may be below the filing threshold at year end (or even closed by year end), a high value in the account(s) at any point during the year could potentially require the filing of the Form 8938.
    6  Foreign pensions may require current year inclusion of current year pension account income.  Deferral of income may not be available due to treaty limitation in combination with U.S. source pension ERISA limits.
    7  Direct interest in undeveloped land or real estate includes undeveloped land or real estate owned by either a disregarded entity or a grantor trust.  If the undeveloped land or real estate is owned by a disregarded entity or grantor trust, then neither the entity nor the undeveloped land or real estate are reported on Form 8938.
    8  See Form 8938, Part IV for excepted assets.  However, include net asset value of constructively owned reportable foreign assets and accounts of a foreign corporation or foreign partnership when determining filing threshold for Form 8938.





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