# FBAR Question



## jwc209

Hi, would greatly appreciate your help regarding FBAR filing.

My husband and I both resides in Hong Kong. He owns 100% interest in a Hong Kong company. Does he have to file the company bank account under FBAR? If so, under which section?

I have signature authority over this company account. Do I need to file it under Part IV but only provide owner information (line 34 onwards)?

Also, do I need to file a foreign branch of a US bank for example, a Citibank account in Hong Kong?

Would appreciate your view.

Thank you


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## jwc209

Also, if our accounts are held separately, should we file FBAR separately or jointly under one person? thanks


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## Bevdeforges

First question is: are you both US citizens? Only US citizens (or US persons - which is slightly different) have to file FBAR at all, so if only one of you is a citizen, that is the person who should file the FBAR.

If your husband has signature authority over the company bank account then, yes, he must include this account on his FBAR filing. It can depend a bit on what kind of company it is as to whether or not it goes into section IV. If the account is in the name of the company, and not in his name, then section IV would seem to do it.

For company accounts where you have signature authority but "no financial interest" (meaning that the account is not a personal account, but part of the company assets) then both you and your husband can report it providing just the ownership information (i.e. line 34 on).

If your husband is a US person and owns 100% of a Hong Kong company he may be subject to FATCA reporting requirements related to the company. Depends on a number of factors, including the net worth of the company.

On the Citibank account in Hong Kong, I'd tend to err on the side of caution. Citibank's foreign "branches" aren't actually branches of the US company, but rather foreign subsidiaries operating under local banking law. Unless they report your interest and other earnings to the IRS directly (and send you a 1099 each year), I would report the accounts along with your other foreign bank accounts. 
Cheers,
Bev


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## jwc209

Bev,

Thank you for your reply. It's very helpful. 

We are both US citizens. 

The bank account in question is opened under the company's name and my husband owns 100 percent of this limited company. We both have signing authority. Sounds like for me I only need to complete line 34 onwards. Can you confirm if it's the same case for my husband. 

For the citibank account I think the bank reports interest income to IRS because they send me 1099 yearly. So in that case I don't need to report it under FBAR or be cautious and report it? 

Thanks for your help


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## Bevdeforges

If you get a 1099 for the Citibank account, I'd leave it at that. The IRS has their information on the account.

Your husband can report the company account the same way you do, as long as he is an employee of the company in some sense of the term. The trick is, however, whether or not the company needs to report to the IRS as a controlled foreign corporation. Form 5471 Certain Taxpayers Related to Foreign Corporations Must File Form 5471
Cheers,
Bev


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## StewartPatton

jwc209 said:


> Hi, would greatly appreciate your help regarding FBAR filing.
> 
> My husband and I both resides in Hong Kong. He owns 100% interest in a Hong Kong company. Does he have to file the company bank account under FBAR? If so, under which section?
> 
> I have signature authority over this company account. Do I need to file it under Part IV but only provide owner information (line 34 onwards)?
> 
> Also, do I need to file a foreign branch of a US bank for example, a Citibank account in Hong Kong?
> 
> Would appreciate your view.
> 
> Thank you


Here's how this all works:

1. You and your spouse should each file a separate FBAR;
2. Since your husband owns more than 50% of the corporation, he is treated as owning the accounts held by the corporation. So, he would report those as accounts that he owns individually.
3. Since you have signature authority over the corporation's accounts, you would report those only as signature authority accounts (with the corporation as the owner).
4. Yes, an account held at a foreign branch of a U.S. bank is a non-U.S. account on the FBAR.
5. Don't forget that you must include all accounts if your aggregate account balance is over US$10,000.

Also, your joint return should include a IRS Form 5471 each year for the corporation, and you may also be required to file an IRS Form 8938 depending on the value of the corporation and your foreign accounts. 

Finally, there are additional issues that you should discuss with a tax attorney if you haven't filed an FBAR (or any of the other forms mentioned above) in previous years and have unreported income (if you don't have any unreported income, you can just file them and the IRS shouldn't give you any trouble).


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## jwc209

Thanks all for your help! We have filed Form 5471 and 8938 in previous years so all good on that front. Just need to get the FBAR sorted. Didn't realize Form TD F 90-22.1 changed to FBAR until I was completing the filing this year... A bit paranoid now that it's late, but better late than never. Thanks again for your help!


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## jwc209

One more question, for the bank account under company name (100% owned by my husband, should I file a separate FBAR for this corporation or just file it under his FBAR on Part II Information on Financial Accounts Owned Separately? Thanks


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## StewartPatton

You and your husband ahould file seoarate FBARs.


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## jwc209

StewartPatton said:


> You and your husband ahould file seoarate FBARs.


Sorry what I meant is should I file a FBAR for the Limited Company? Or filing the company account under my husband will be sufficient?

Thanks


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## StewartPatton

Only US persons are required to file FBARs, so the company itself does not need to file an FBAR.


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## jwc209

StewartPatton said:


> Only US persons are required to file FBARs, so the company itself does not need to file an FBAR.


right! thank you


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## BBCWatcher

Bevdeforges said:


> If you get a 1099 for the Citibank account, I'd leave it at that. The IRS has their information on the account.


That's incorrect, Bev.

FBARs (FinCEN Form 114) don't go to the IRS. They go to another agency within the U.S. Treasury Department. Always remember that FinCEN Form 114 is a completely separate filing and has no relation whatsoever to IRS filings.

Accounts held with foreign branches of U.S. global multinational banks, e.g. Citibank, are required to be included (if otherwise reportable) in FBARs. Such accounts do count toward calculating the threshold for filing. Yes, you may have only one account, and that account might be with Citibank Japan (for example), and it might have had a value of $10,000 for just one brief moment the preceding calendar year. Even if all that's true, U.S. persons are legally required to file FinCEN Form 114 for that year.

You may be thinking of FATCA (IRS Form 8938). IRS Form 8938 does not require listing accounts for which you're receiving 1099s, i.e. foreign branches of U.S. financial institutions (that know you're a U.S. person, as they should).

Yes, FBAR and FATCA have slightly different rules relating to which accounts are reportable, the threshold amounts, and the threshold calculations.


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