Form 8938 foreign financial assets

Forum|Forum|6 years ago
June 1, 2019
2 replies
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Had to fill out FBAR Fin Cen Form 114 in the past,but not Form 8938. Because I inherited my mother's saving accounts, the value is much higher for 2016.

Question: Do I have to declare all the interest, even though some of the accounts belonged to my mother for most of the year?

Also, Form 8938 requires maximum account value during year rather than amount year end, which makes the total account values really high. Let's say, Account A has $200,000 on October 1, Account B has $100,000. $100,000 is transferred from A to B, now Account A has $100,000 balance, Account B $200,000. The total for the accounts should be $300,000, but according to the reporting requirements it is now $400,000. Am I interpreting this right?

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Best answer by pk12_2

yes and NO -- there are two threshholds that trigger the FATCA reporting -- for example for a single filer it $50,000 aggregate value at the end of the year or $75,000 at any time in the year. It does mean that in your example for a single taxpayer living in the USA, you have to report any ways because you will be above the threshhold .

But another exception come into place though because you say you received a gift/ inheritence from a foreign person abobe $100,000, you need to report that transaction on form 3520. The amount reported on form 3520 exempts you from having to report FATCA form 8938.

Now next year if you do not re-patriate the amounts to the USA, you will have to report both FBAR and FATCA

pk12_2Answer

Employee

Now next year if you do not re-patriate the amounts to the USA, you will have to report both FBAR and FATCA

syltanAuthor

Thanks. Filing joint return, but inherited accounts in my name. Not planning to bring amounts to U.S. Would it be better in this case to file FBAR and FATCA rightaway this year and forget about the 3520.

Fionja

Hi, being in the same situation, I am interested in the unanswered part of the original question:

"Form 8938 requires maximum account value during year rather than amount year end, which makes the total account values really high. Let's say, Account A has $200,000 on October 1, Account B has $100,000. $100,000 is transferred from A to B, now Account A has $100,000 balance, Account B $200,000. The total for the accounts should be $300,000, but according to the reporting requirements it is now $400,000. Am I interpreting this right?"

In my case, due to some shifting of assets before transferring the whole to my US account, the total amount inflates the maximum account values by easily 100%. Do I manually change that to an estimate of the maximum value at my "richest point in time" during the year (which is bound to be somewhat tedious and difficult)?

pk12_2

Employee

@Fionja , per your example , at sometime during the year both account A and B reached US$200,000. So for purposes of ONLY threshold ( to need to file ) determination each account must be reported as US$200,000. This reporting has NO TAX implications. If these are bank accounts i.e. liquid assets then you also have to report FBAR -- generally FATCA reporting does not exclude need for FBAR reporting.

Here is a summary comparison of FBAR and FATCA --> Comparison of Form 8938 and FBAR requirements | Internal Revenue Service

Is there more I can do for you ?