The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, requires
certain U.S. taxpayers to report their interests in specified foreign financial
assets. The reporting requirement may apply if the assets have an aggregate
value exceeding certain thresholds. The IRS has released Form 8938, Statement of
Specified Foreign Financial Assets, for this reporting requirement under
FATCA.
Reporting
For now, only specified individuals are required to file Form 8938, but
specified U.S. entities will eventually also have to file the form. Taxpayers
who do not file a federal income tax return for the year do not have to File
Form 8938, even if the value of their foreign assets exceeds the normal
reporting threshold.
Individuals who have to file Form 8938 include U.S. citizens, resident aliens
for any part of the year, and nonresident aliens living in Puerto Rico or
American Samoa.
Reporting applies to specified foreign financial assets. Specified foreign
financial assets include:
- A financial account maintained by a foreign financial institution;
- Other foreign financial assets, such as stock or securities issued by a
non-U.S. person, or an interest in a foreign entity.
The aggregate value of the individual's specified foreign financial assets
must exceed specified reporting thresholds, as follows:
- Unmarried U.S. taxpayers, and married U.S. taxpayers filing a separate
return - more than $50,000 on the last day of the year, or more than $75,000 at
any time during the year;
- U.S. married taxpayers filing a joint return - more than $100,000 on the
last day of the year, or more than $150,000 at any time during the year; or
- Taxpayers living abroad: if filing a joint return, more than $400,000 on the
last day of the year, or more than $600,000 during the year; other taxpayers,
more than $200,000 on the last day of the year, or more than $300,000 at any
time during the year.
Taxpayers who report assets on other forms, such as Form 3520, do not have to
report the asset on Form 8938, but must use Form 8938 to identify other forms on
which they report.
Filing
Reporting applies for tax years beginning after March 18, 2010, the date that
FATCA was enacted. Most taxpayers, such as those who report their taxes for the
calendar year, must start filing Form 8938 with their 2011 income tax
return.
If you have any questions about Form 8938, please contact our
office.