Thailaw Posted June 10, 2012 Share Posted June 10, 2012 JT was kind enough to remind US citizens living in Thailand about the FBAR filing requirement that is fast approaching. There is a new one starting with tax year 2011-- Form 8938 -- Foreign Financial Asset Report, which is required to be filed with your Form 1040 US Federal Tax Return if your foreign financial assets equal or exceed the filing requirement threshold. For persons living outside the US, the aggregate foreign asset value thresholds are much higher than with FBAR -- US$ 300,000 at any time during the year or US$ 200,000 at the end of the year. But asset categories that qualify and are to be included are also much broader. For example, from the IRS Basic Q&A on Form 8938 "If . . . real estate is held through a foreign entity, such as a corporation, partnership, trust or estate, then the interest in the entity is a specified foreign financial asset that is reported on Form 8938, if the total value of all your specified foreign financial assets is greater than the reporting threshold that applies to you. The value of the real estate held by the entity is taken into account in determining the value of the interest in the entity to be reported on Form 8938, but the real estate itself is not separately reported on Form 8938." So, if you owned a home (or condo) in Thailand through a company structure worth 5 million Baht and had B1.3 million in Thai bank accounts or Thai company stock (or other non-US bank accounts or company stock) on 31st December 2011, you may be required to file Form 8938 with your 2011 US Federal tax return. (The exchange rate for Thai baht into US$ is the same 31.29 as used for FBAR.) If you have already filed your 2011 US Federal Tax Return and are required to file Form 8938 but did not, you can file an amended Form 1040X and attach the Form 8938 to it. The penalties for not filing Form 8938 when required to do so are extermely onerous. For more, see Form 8938 at www.IRS.gov. Link to comment Share on other sites More sharing options...
elshaheen Posted June 10, 2012 Share Posted June 10, 2012 I guess foreign teachers working in Thailand don't have to file. None of them make over $50,000 a year. Link to comment Share on other sites More sharing options...
JimGant Posted June 10, 2012 Share Posted June 10, 2012 For persons living outside the US, the aggregate foreign asset value thresholds are much higher than with FBAR -- US$ 300,000 at any time during the year or US$ 200,000 at the end of the year. But, if married filing jointly, this doubles to $400/$600k (remember, you can file jointly, even if wife has no connection to the US -- but does have an ITIN number). Link to comment Share on other sites More sharing options...
maxman71 Posted June 10, 2012 Share Posted June 10, 2012 This new form seems redundant. If an American citizen is living overseas and has bank accounts in aggregate of USD 10,000 at any time during the year and has an interest in a foreign corp, trust, etc of at least 10% and that foreign entity owns real estate, then that information is carptured on form 5471 which gets filed with the 1040. But I guess if the US citizen owns less than 10% in a foreign corp and may not be required to file form 5471 with their 1040, there could be situations that their pro-rated share of the real estate owned by the foreign entity could cause them to be required to file the 8938. Example: US citizen has in aggregate USD 9,000 in Thai bank accounts and 9% interest in a Thai co. that owns real estate worth USD 3,000,000. Then although they would not be required to file the FBAR and also perhaps not required to file the 5471, they would be required to file the 8938. Or, this is yet another tactic by the IRS to get people to fess up to their overseas assets, if they aren't filing their FBARs/5471's when required to do so, they may get caught by filing the 8938. Link to comment Share on other sites More sharing options...
dekestone Posted June 11, 2012 Share Posted June 11, 2012 Or, this is yet another tactic by the IRS to get people to fess up to their overseas assets, if they aren't filing their FBARs/5471's when required to do so, they may get caught by filing the 8938. Think you hit the nail on the head. The FBAR and the 8938 are redundant to some extent, but remember the FBAR goes to the Treasury Dept. (not the IRS) while the 8938 is filed with your 1040. Link to comment Share on other sites More sharing options...
lanny Posted June 11, 2012 Share Posted June 11, 2012 Its not that simple! Yet it is also easier than these posts might lead you to believe. For example, if you file Form 5471, you do not have to repeat any information on Form 8938. There is a box on the broader form to check if you file the corporate report. If you do , you needn't include any additional information of the 8938. On the other hand, all the bank account information must be reported. Why isn't there a similar box to that for the 5471? It's because the accounts to be reported may be different. On the FBAR, you must report all accounts on which you have signature authority. If you can sign checks on a company account, for example, that account has to be included on your FBAR. On the other hand, Form 8938 only requires accounts you own. The FBAR asks for the highest balance during the year; Form 8938 only asks for year end balances. Link to comment Share on other sites More sharing options...
Javabear Posted June 13, 2012 Share Posted June 13, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. Link to comment Share on other sites More sharing options...
lannarebirth Posted June 13, 2012 Share Posted June 13, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. The asset declaration is really a bridge to far. The IRS will not understand how one holds assets in dozens of different countries and the onus will be on the taxpayer to explain it to them. My wife holds tremendous real estate assets here but they cannot be in my name. Am I evading taxes by making not even a mention of the home we live in free and clear? It's outrageous! Link to comment Share on other sites More sharing options...
lanny Posted June 13, 2012 Share Posted June 13, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. The asset declaration is really a bridge to far. The IRS will not understand how one holds assets in dozens of different countries and the onus will be on the taxpayer to explain it to them. My wife holds tremendous real estate assets here but they cannot be in my name. Am I evading taxes by making not even a mention of the home we live in free and clear? It's outrageous! Even if the home were in your name, it would not be reported on the new form. Real estate is not a financal asset! Only if you own the property through a corporation or other entity do you have a reporting requirement. Even then, it is the corporation ownership that must be reported. Link to comment Share on other sites More sharing options...
lannarebirth Posted June 13, 2012 Share Posted June 13, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. The asset declaration is really a bridge to far. The IRS will not understand how one holds assets in dozens of different countries and the onus will be on the taxpayer to explain it to them. My wife holds tremendous real estate assets here but they cannot be in my name. Am I evading taxes by making not even a mention of the home we live in free and clear? It's outrageous! Even if the home were in your name, it would not be reported on the new form. Real estate is not a financal asset! Only if you own the property through a corporation or other entity do you have a reporting requirement. Even then, it is the corporation ownership that must be reported. My mistake, thanks for clarification. My blood pressure spiked as I was reading the OP causing lightheadeness and confusion. Thanks again. Link to comment Share on other sites More sharing options...
Javabear Posted June 13, 2012 Share Posted June 13, 2012 This reporting requirement may also be a reaction to all the people renouncing their US citizenship. Uncle Sam wants his pound of flesh before he will let you go! Link to comment Share on other sites More sharing options...
Popular Post flying Posted June 14, 2012 Popular Post Share Posted June 14, 2012 freedom's just another word for nothing left to lose Declare 3 Link to comment Share on other sites More sharing options...
Khun Jean Posted June 15, 2012 Share Posted June 15, 2012 Police: Everything you say can and will be used against you. IRS: Everything you declare can and will be used against you. 1 Link to comment Share on other sites More sharing options...
Javabear Posted June 15, 2012 Share Posted June 15, 2012 Police: Everything you say can and will be used against you. IRS: Everything you declare can and will be used against you. If you fail to declare every last cent we will declare you to be an economic terrorist, throw you in Gitmo, and confiscate everything. Link to comment Share on other sites More sharing options...
rotary Posted June 17, 2012 Share Posted June 17, 2012 This reporting requirement may also be a reaction to all the people renouncing their US citizenship. Uncle Sam wants his pound of flesh before he will let you go! Truer words were never spoken.......or typed in this case. Link to comment Share on other sites More sharing options...
how241 Posted June 17, 2012 Share Posted June 17, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. +1 Link to comment Share on other sites More sharing options...
MrRealDeal Posted June 17, 2012 Share Posted June 17, 2012 (edited) Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. The asset declaration is really a bridge to far. The IRS will not understand how one holds assets in dozens of different countries and the onus will be on the taxpayer to explain it to them. My wife holds tremendous real estate assets here but they cannot be in my name. Am I evading taxes by making not even a mention of the home we live in free and clear? It's outrageous! Since you don't own it your wife does you dont need to mention it ..... so its not outrageous ...... The IRS is quite aware thet their are people who own assets in dozens of companys\countries ..... any other complaints ? Edited June 17, 2012 by MrRealDeal Link to comment Share on other sites More sharing options...
lanny Posted June 18, 2012 Share Posted June 18, 2012 Just another way the US governement is gathering information in order to tax its citizens on worldwide income and assets. The asset declaration is really a bridge to far. The IRS will not understand how one holds assets in dozens of different countries and the onus will be on the taxpayer to explain it to them. My wife holds tremendous real estate assets here but they cannot be in my name. Am I evading taxes by making not even a mention of the home we live in free and clear? It's outrageous! Since you don't own it your wife does you dont need to mention it ..... so its not outrageous ...... The IRS is quite aware thet their are people who own assets in dozens of companys\countries ..... any other complaints ? That's true - but for the wrong reason! If the assets are reportable under the rules AND they file a joint return, the wife's assets must be included. If, however, as appears to be the case here, these assets are direct holdings in real estate, they are not covered by the new report. On the other hand, if they are in the form of investments in real estate holding companies, they are covered. Real estate, itself, is not a "financial asset," but a company owning real estate is. So, MrRealDeal is correct but not because the property is in the wife's name. The actual reason is that real estate is not a financial asset. Link to comment Share on other sites More sharing options...
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