# Foreign Income option to select on Turbo-Tax



## manny.j

I am in the US and my wife and in the process of filing our 2011 Tax-Returns on Turbo Tax.

Basically I opened a Joint account abroad with my mother, which was opened in 2010 using her money after my dad died. 

One question I had was which option to select:

*Option 1*: I had a bank, broker, or other financial account in a foreign country.
*Option 2*: I signed on, or had other authority over, a bank, broker, or other financial account in a foreign country.

The interest earned on this account contributes to my mother's pension, but because my name is there I lawfully reported 50% of the interest earned in last year's tax returns as well as in FBAR. 

From the above options, I am leaning towards selecting Option 1 as I have a debit card from this bank that I have never used but would like an opinion of an experienced person here. Hence, can anyone suggest anything?

Thanks.


----------



## Bevdeforges

I know that the professional tax preparers may disagree with me here, but I would choose option 2. If the totality of the interest income is going to your mother, I would claim this as having signature authority over the account, rather than claiming half the interest on your income tax form.

It's a bit of a stretch - but in the US when there are multiple signers on an account, you are supposed to designate the "primary" social security number under which the income of the account is reported. This would seem to be a similar situation, as long as your mother is claiming the interest on the account as appropriate on her income taxes (in the UK or wherever).

It's not a strictly "by the book" approach - but unless you're talking major $$$ here, I think it might fly. (It's what my former big accounting firm employer used to call an "assertive" tax position. You only need to defend it if they come back later with questions.)
Cheers,
Bev


----------



## manny.j

Bevdeforges said:


> I know that the professional tax preparers may disagree with me here, but I would choose option 2. If the totality of the interest income is going to your mother, I would claim this as having signature authority over the account, rather than claiming half the interest on your income tax form.
> 
> It's a bit of a stretch - but in the US when there are multiple signers on an account, you are supposed to designate the "primary" social security number under which the income of the account is reported. This would seem to be a similar situation, as long as your mother is claiming the interest on the account as appropriate on her income taxes (in the UK or wherever).
> 
> It's not a strictly "by the book" approach - but unless you're talking major $$$ here, I think it might fly. (It's what my former big accounting firm employer used to call an "assertive" tax position. You only need to defend it if they come back later with questions.)
> Cheers,
> Bev


Thanks Bev for your help...the interest is approx. $3500 (my 50% share) for this Fixed-Deposit I have with her jointly. All the interest contributes to my mother's pension although one half of this interest goes to her solo current account (~$2000) and other portion ($1500) goes to this joint current account I have with her. Again even though my name is there in this joint current account only my mother occasionally accesses it and I have not withdrawn a single penny from it as I live in the US.

I assume in Option 2 I will be exempted from paying tax on this interest and in Option 1 I will be paying taxes...I did pay taxes on this money last year only because I was unsure and did this via H&R Block guy who was a real dumbo as I got no help from him. 

However, how can one prove that I only have signature authority over this account if my name is legally there in the Fixed-Deposit and in the joint current account where portion of the interest is deposited?


----------

