# Seeking advice



## Leopard123 (Feb 23, 2019)

My sister is in one of those situations where 1.7% of insider shares in a family owned company was under her name here in Pakistan. These shares were actually owned by four different members of the founding family. This happened in around 2004. Separately, she got her own shares gifted by her grandma which in today's value is worth around 40000 USD, which is what she has today. The 1.7% shares were transferred back to the original owners in 2016. In between the transfer for those shares, she got no dividend or interest. She did get her interest and dividend from the gifted shares. 
She wants to disclose this, but doesn't know how to go about doing it. 
She lives in Pakistan with her three kids. She has pretty big asets in the US she got through alimony, and collects interest and dividend, and uses that as the source of income. She files her 1040 every year. 

Thanks so much for your help.


----------



## Bevdeforges (Nov 16, 2007)

You say she has been filing her 1040s all along. How has she been reporting these shares in the business? (Or rather, has she been reporting the shares at all?)

Things don't get really tricky/awkward until and unless her ownership share reaches 10%. So if she's still somewhere in the 1.7% range, there is no reason she couldn't just report these like ordinary shares. There are also a number of FATCA related reporting requirements that don't kick in until a taxpayer has at least $200,000 of foreign financial assets - so that may work in her favor, too.


----------



## Leopard123 (Feb 23, 2019)

Thanks for your reply. No she has been reporting the shares. How about FBAR, since these shares are in electronic form. The sum of the 1.7% shares may turn out to be quite large, although she was just like keeper of these.


----------



## Leopard123 (Feb 23, 2019)

Sorry I meant to say she has Not been reporting these shares


----------



## Bevdeforges (Nov 16, 2007)

I'm not entirely sure that I follow the transactions you're describing - between shares she was just "holding" and her own shares and which shares she got interest and dividends on. But I'd just treat this all like any other share transactions - report the interest and/or dividends that she received in 2018 on that return. 

But have her take a look at this chart: https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements which compares the requirements of the form 8938 (which she may not have to file) and those of the FBAR.

You'll see that, unless the shares are held in a financial account, they aren't reportable under FBAR (and actually, it's the financial account they're interested in, not the actual stock). The 8938 is only used in those years where the value of the foreign assets exceeds $200,000 for someone living outside the US. It may be not as big an issue as you think.


----------

