Foreign Asset Reporting

Foreign Asset Reporting – Form 8938 – New for 2011 Tax Filing!

***New for 2011 Tax Filing***

Under Section 6038D of the Tax Code, any taxpayer holding any interest in a Specified Foreign Financial Asset (SFFA) must report this information to the IRS, if the aggregate value of all such assets exceeds $50,000 at any point during the tax year, or higher.

Taxpayer’s will be required to report these SFFA holdings using Form 8938 with the filing of their 2011 Form 1040 or Form 1040 NR.

Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or other interest in a foreign entity and any financial instrument or contact with an issuer or counterparty that is not a U.S. person.

The threshold to file form 8938 will depend upon where the taxpayer is living and the filing status of the taxpayer (single, married filing joint, or married filing separately).

Specified individuals required to file can be U.S. citizens (living in the U.S. or abroad) and resident aliens of the U.S.

If the value of your specified foreign financial assets is more than the appropriate reporting threshold, and no other exception applies, you will be requested to file Form 8938 even if none of the specified foreign financial assets affect your tax liability for the year.

Please contact the office to discuss this in more detail, particularly if you think you may fall into Form 8938 guidelines.