# Questions: 8938



## aawasthi001 (Jan 19, 2011)

Hi,

1. Please confirm filing thresholds:

Is it Instructions for Form 8938 (12/2013)
or
Comparison of Form 8938 and FBAR Requirements

2. 8938 does NOT include foreign accounts where tax-payor is a signing authority with no financial interest

Thanks


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## Bevdeforges (Nov 16, 2007)

Both the instructions and the Comparison document tend to mention only the domestic threshold for filing. If you are resident outside the US, the filing threshold for form 8938 is $200,000 unless you're filing jointly with your spouse, in which case it's $400,000 (in reportable foreign assets). True, the 8938 does not include accounts over which you have signature authority but no financial interest.

Take a look here for a fuller explanation: Summary of FATCA Reporting for U.S. Taxpayers Scroll down to the section on Reporting Thresholds and then to the section on Taxpayers Living Abroad.
Cheers,
Bev


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## FFMralph (Dec 22, 2012)

Looking through the Instructions for Form 8938 I ran across this on page 4:

*Interests in assets held in financial accounts.* 
If you have an interest in a financial account that holds specified foreign financial assets, you do not have to report the assets held in the account 

What does this refer to? Aren't most assets (i.e. savings) held in financial accounts?
Does this refer to US accounts holding foreign assets?


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## BBCWatcher (Dec 28, 2012)

Whenever you see something in IRS instructions that at first (or fifth) glance seems confusing, look to the definitions the IRS provides. In this case the IRS provides definitions for "Financial Account" and "Specified Foreign Financial Assets" just before the text you cite, right on the same page.

So, let's parse this together: _If you have an interest in a Financial Account (a term defined above) that holds Specified Foreign Financial Assets (another term defined above), you do not have to report the (Specified Foreign Financial) Assets held in(side) the(that) (Financial) Account. (You may have to report the Financial Account.)_

In other words, this particular part of the instructions is simply the IRS explaining what level of detail they want reported -- basic set theory, if you will. They don't necessarily need the "interior" details of all accounts. For example, if you have a brokerage account in Hong Kong, apparently you only have to report the "wrapper" and not all the individual holdings within that brokerage account. Or if you have a brokerage account at Merrill Lynch in New York that happens to contain within it a Brazilian rubber plantation fund or 6 shares of Nestle (traded in Switzerland), it seems you don't have to report anything for that account in Form 8938. (This is rather similar to how FinCEN Form 114 operates, as I recall -- you "roll up" to the master account number and don't have to break everything out into separate sub-accounts.)

As always, consult a tax professional and/or the IRS if you need clarification, but that'd be my read.


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## Bevdeforges (Nov 16, 2007)

FFMralph said:


> Looking through the Instructions for Form 8938 I ran across this on page 4:
> 
> *Interests in assets held in financial accounts.*
> If you have an interest in a financial account that holds specified foreign financial assets, you do not have to report the assets held in the account
> ...


Basically this refers to something like a US based mutual fund that invests in "foreign stocks." The fund itself is run by a US entity (like Fidelity or Vanguard, for example) and sends out 1099s and all. The fact that the fund holds foreign assets for you is ok - they're already covered and being reported for you so you don't need to include them in your sum total of "specified foreign financial assets."
Cheers,
Bev


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