Form 114 Report of Foreign Bank and Financial Accounts must be filed with the Financial Crimes Enforcement Network FinCEN, a bureau of the Treasury.
Taxpayers with an interest in or signature or other authority over foreign financial accounts, whose aggregate value exceeds $10,000 at any time during the year, generally must file.
The FBAR is not included with the tax return. It is separately filed with FinCEN. It is due by April 15, with an automatic six month extension to October 15.
In the preparation of your tax return, schedule B Part III has a question regarding a financial interest in or signature authority over a financial account in a foreign country. You are also to enter the name of the foreign country where the financial account is located.
Form 8938 does not affect a taxpayer’s obligation to file FinCEN Form 114 Report of Foreign Bank and Financial Accounts. The 8938, unlike the FBAR Form 114, is filed with the IRS with your tax return.
Individuals and domestic entities should check the requirements and reporting thresholds for both forms to determine if they should file one or both.
Who Must File
For Form 8938 Statement of Specified Foreign Financial Assets
Specified individuals and specified domestic entities that have interest in specified foreign financial assets and meet the reporting threshold. Specified individuals include US citizens, resident aliens, and certain non-resident aliens. Specified domestic entities include certain domestic corporations, partnership, and trusts.
Reporting Threshold (Total Value of Assets)
Specified individuals living in the US: For unmarried individuals or married filing separately, total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year. For married individuals filing jointly, total value of assets was more than $100,000 on the last day of the year or more than $150,000 at any time during the year.
Specified individuals living outside the US: For unmarried individuals or married filing separately, total value of assets was more than $200,000 on the last day of the year or more than $300,000 at any time during the tax year. For married individuals filing jointly, total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.
Specified domestic entities: Total value of assets was more than $50,000 on the last day of the tax year, or more than $50,000 at any time during the tax year.
Types of Foreign Assets That are Reportable
Financial deposit and custodial accounts held at foreign financial institutions
Foreign stock or securities not held in a financial account
Foreign stock or securities held in a financial account at a foreign financial institution, the account itself is subject to reporting, but the contents of the account do not have to be separately reported
Foreign partnership interests
Foreign mutual funds
Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor
Foreign issued life insurance or annuity contract with a cash value
Foreign hedge funds and foreign private equity funds
Foreign real estate held directly is not a FATCA asset
Foreign real estate held through a foreign entity is not a FATCA asset, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate
Need help with your FBAR and FATCA filings? Contact Tax Attorney Abtin Barzin