# 8938 reporting threshold



## andie17 (Feb 21, 2017)

I am curious how people on this forum interpret the instructions for form 8938 thresholds. As per the IRS instructions:

"If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year" 

If you have $100k in bank A and move it to Bank B and then move it to Bank C, did you have $300k or $100k of assets during the year? Obviously it is still the same $100k, but how does the IRS view the total assets?

I have looked at several websites from lawyers and accountants that are unequivocal that the above scenario equals $300k and requires 8938 (and of course they can help me with all of the forms).

Thanks


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## Moulard (Feb 3, 2017)

The total value of the assets in your example is $100k. - the value doesn't change just because it is moved. No reporting is required (assuming this is below the reporting threshold for your filing status)

If we upped things.. and it was $210k moved between the three accounts..

The max value of each account would be $210k and the total value would be $210k and would be reportable (assuming above your reporting threshold).

I have found that many of the tax tools would report this as having a max value of $630k because none of them consider the concept of moving assets between financial accounts.


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## Bevdeforges (Nov 16, 2007)

Concur with Moulard.

There are differences in figuring the amounts involved between the FBAR and the 8938 form. FBAR asks for maximum value for the year in each account - but doesn't ask for a total. So, $110,000 moved from account A to account B to account C all in one year would generate a report showing 3 accounts, each with a maximum balance of $110,000. But no overall total of $330,000 anywhere on the form.

The 8938 only asks for the value of your specified accounts in total - so at any given moment, you would only have $110,000 worth of assets, even if you transferred them between 4 or 5 accounts during the year.

For the FBAR, if you had a total of $8000 and transferred it from account A to B to C, you still wouldn't need to report it, because your combined total financial assets was only $8000 (i.e. below the threshold) at any given moment. If, on the other hand, you had $20,000 in one account and made the indicated transfers, you would be expected to report all three accounts at $20,000 max value for that year.


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## andie17 (Feb 21, 2017)

Thanks Moulard and Bevdeforges, that is the way I read the instructions. 

I am not sure about the statement: "For the FBAR, if you had a total of $8000 and transferred it from account A to B to C, you still wouldn't need to report it, because your combined total financial assets was only $8000 (i.e. below the threshold) at any given moment.

From the IRS comparison 8938 vs. FBAR: _"Aggregate value of financial accounts exceeds $10,000 at any time during the calendar year. This is a cumulative balance, meaning if you have 2 accounts with a combined account balance greater than $10,000 at any one time, both accounts would have to be reported."_

It would be helpful if the IRS provided specific examples. I tend to err on the side of over reporting; it really isn't difficult, especially the FBAR, and I sleep better.


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## Moulard (Feb 3, 2017)

The definition of aggregate value is the total value of a number of smaller sums, added together and treated as an individual (cumulative) sum.

So basically if the cumulative balance of all your accounts together is above the threshold on the 31st of December, or above the higher threshold on any given day during the year its reportable.

its just their way of trying to describe how to determine if the threshold is met. These sort instructions tend to be based on the related treasury regulation, which is not really aimed with the taxpayer in mind.


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