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8938 questions

Forum|Forum|2 years ago
March 11, 2024
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My husband and I just learned that we should have been filing 8938's for his 3 pension plans which are held in the UK. We have not received any income from these so we are filing amended 1040x returns to include this form for the past 3 years (as well as doing 6 years of past FBAR's). My question is: since we did not have any dividends, do we put the value at zero even though we do have statements on a yearly basis so we know the approximate value? Thank you!

Best answer by SusanY1

Since you have a statement that provides a value, you enter that value for Form 8938. You only enter zero as the value when you have no distributions and you do not have any way to estimate the balance. In those cases (as can happen when you have a defined benefit sort of plan - one that provides a pension income at a certain date but has no cash value prior to that date) then you report the zero along with the other account information in order to notify the IRS of the existence of the account.

From the 8938 instructions: "If you received no distributions during the tax year and do not know or have reason to know based on readily accessible information the fair market value of your interest as of the last day of the tax year, use a value of zero as the maximum value of the asset." [emphasis added]

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ThomasM125

There wouldn't be any reportable dividends associated with a pension plan. The only thing you would report on your income tax return Form 1040 associated with a pension plan would be distributions that you received or contributions you made, in the case of an IRA or similar plan. So, you would not report anything for dividends on your pension plans.

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nhgbcaAuthor

Thank you. However, my question was really around the value to report on the 8938, where it asks for maximum value of the foreign asset. Since we have year end statements which tell us the value of the pension plans, I thought we would put that, but have found information on the IRS website which says if there are no dividends, you can put zero as the value. But then I dont know why we would fill out the 8938 in the first place if we are just putting zero!

SusanY1Answer

Since you have a statement that provides a value, you enter that value for Form 8938. You only enter zero as the value when you have no distributions and you do not have any way to estimate the balance. In those cases (as can happen when you have a defined benefit sort of plan - one that provides a pension income at a certain date but has no cash value prior to that date) then you report the zero along with the other account information in order to notify the IRS of the existence of the account.

From the 8938 instructions: "If you received no distributions during the tax year and do not know or have reason to know based on readily accessible information the fair market value of your interest as of the last day of the tax year, use a value of zero as the maximum value of the asset." [emphasis added]

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