# Fbar/8938



## miky348

Questions:

1. For both, FBAR/8938 does the bank account must be open on the last day of the year (Dec31) to be reported? I ask because I closed one of the bank account during the year and would like to know if this account needs to be reported or not

2. In 8938 do I have to report bank accounts where I am a signing authority but no financial interest?

3. If Yes to above, then if my signing authority was cancelled during the year (but the bank account is still open) do I still report this account in FBAR/8938?

4. If Yes to above, in 8938 what do I check in Part-5 #3?

5. In 8938, for accounts where I have signing authority but no financial interest, what do I check in Part-5 #1?

Thanks


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## BBCWatcher

1. It doesn't matter. If an account is open for any length of time during the calendar year, it counts and is reportable. You could open it on a Tuesday morning and close it that same Tuesday afternoon, within the same day, and that'd still be a reportable account.

2. Maybe, but in most cases not. Here's what the IRS says about "When do you have an interest in an account or asset?" with respect to Form 8938: "If any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the account or asset are or would be required to be reported, included, or otherwise reflected on your income tax return." I've underlined some key words to reinforce the point that the IRS is also asking you to consider hypothetical situations with respect to each account.

3. If it meets the IRS's requirement in #2, it's the same answer as #1: yes.

4. The _account_ was not closed, so you don't check box 3(b). Answer the question _asked_, not the question you think should be asked. (I'm assuming here that the account is reportable, but maybe it doesn't pass the IRS's requirement in #2 above.)

5. _Probably_ custodial (assuming it's reportable again per #2), but I'd have to see how the account is titled.


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## miky348

BBCWatcher said:


> 2. Maybe, but in most cases not. Here's what the IRS says about "When do you have an interest in an account or asset?" with respect to Form 8938: "If any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the account or asset are or would be required to be reported, included, or otherwise reflected on your income tax return." I've underlined some key words to reinforce the point that the IRS is also asking you to consider hypothetical situations with respect to each account.


I called international irs office at 267-941-1000, and they claim to just replicate FBAR into 8938. I wasn't satisfactory with their response.




BBCWatcher said:


> 5. _Probably_ custodial (assuming it's reportable again per #2), but I'd have to see how the account is titled.


I am a director of a foreign corporation with no share-holding. Only reason I became a director is because the sole shareholder was always traveling and the bank would not add me as a signing authority unless I become a director


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## BBCWatcher

The IRS has a great Web page with a table that summarizes the differences between Form 8938 ("FATCA") and FinCEN Form 114 ("FBAR"). There are some differences. FinCEN Form 114 refers to "signature authority" accounts and explains what those are pretty well. IRS Form 8938 doesn't use that language, so you have to determine whether each particular account fits the IRS's definition.

Another difference (off the top my head -- check the instructions though) is that FinCEN Form 114 requires reporting accounts held at foreign subsidiaries of U.S. financial institutions -- Citibank Japan, Citibank Singapore, etc. -- and IRS Form 8938 doesn't. (Another way to say this is that if you're getting a 1099 form for the account, it probably isn't reportable on Form 8938.)

Anyway, there are differences. As an aside, I and many others would like to see one financial account disclosure report with one set of uniform rules, not two mostly overlapping reports. There's a decent chance Congress will make that happen within the next couple years given enough citizen pressure, but we'll see.


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## miky348

1. What is the IRS link explaining FBAR & 8938 differences? 

2. Do I put accounts in 8938, where I have signing authority but no shareholding/interest?

3. If Yes to #2, then what to select Deposit/Custody for above account?

Thanks


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## Bevdeforges

Comparison of Form 8938 and FBAR Requirements

I will leave you to BBCWatcher's advice for the 8938 as I stay well away from that one. However, do check out the instructions for IRS form 8832 as it includes a list of those "Foreign Entities Classified as Corporations for Federal Tax Purposes."
Cheers,
Bev


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