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Blog > Posts > A New Tax Form for 2011
A New Tax Form for 2011

Previously I mentioned the IRS has come out with a new form for the 2011 tax year, Form 8938, to report the fair market value of a taxpayer’s foreign financial assets if the value exceeded a certain limit.  The minimum total value requirement for Form 8938 is $50,000 at the end of the year or $75,000 at any point during the year for single or married filing separate filers, and $100,000 at the end of the year and $150,000 at any point during the year for married filing joint filers.  There are other provisions (and exceptions) for trusts, partnerships, and corporations.

 

What is considered to be a specified foreign financial asset by the IRS includes several common assets, such as: interest in a foreign trust, estate, pension plan, or deferred compensation plan, interest in a foreign entity (even foreign disregarded entities), and, of course, a financial account maintained by a foreign financial institution.  Most taxpayers will have a reporting requirement simply due to their foreign bank account if the total value exceeds the appropriate threshold.  Taxpayers are still required to file an FBAR even if they have a Form 8938.  However, taxpayers do not have to report their foreign financial asset if it is already reported on Forms 3520, 5471, 8621, 8865, or 8891.

 

In addition to the fair market value of the specific asset needing to be reported, the foreign income earned by that specific asset is to be detailed on the form.  It’s also worth noting that foreign real estate, including foreign rental properties, is not required to be reported on this form, even if the taxpayer recognizes foreign income from their rental property.

March 2. 2012 | Lindsay Dattilio

 

 

A New Tax Form for 2011

 

Previously I mentioned the IRS has come out with a new form for the 2011 tax year, Form 8938, to report the fair market value of a taxpayer’s foreign financial assets if the value exceeded a certain limit.  The minimum total value requirement for Form 8938 is $50,000 at the end of the year or $75,000 at any point during the year for single or married filing separate filers, and $100,000 at the end of the year and $150,000 at any point during the year for married filing joint filers.  There are other provisions (and exceptions) for trusts, partnerships, and corporations.

 

What is considered to be a specified foreign financial asset by the IRS includes several common assets, such as: interest in a foreign trust, estate, pension plan, or deferred compensation plan, interest in a foreign entity (even foreign disregarded entities), and, of course, a financial account maintained by a foreign financial institution.  Most taxpayers will have a reporting requirement simply due to their foreign bank account if the total value exceeds the appropriate threshold.  Taxpayers are still required to file an FBAR even if they have a Form 8938.  However, taxpayers do not have to report their foreign financial asset if it is already reported on Forms 3520, 5471, 8621, 8865, or 8891.

 

In addition to the fair market value of the specific asset needing to be reported, the foreign income earned by that specific asset is to be detailed on the form.  It’s also worth noting that foreign real estate, including foreign rental properties, is not required to be reported on this form, even if the taxpayer recognizes foreign income from their rental property.

 

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