# Confused about Form 8938 instructions



## Carmonli (Jul 1, 2014)

I have some confusion about reporting of accounts on Form 8938.

I’m not sure whether my foreign pension will push me over the requirement to file form 8938 this year. However, it is money that I can’t access currently (deferred payment only at retirement age). This is the section in the IRS instructions that is confusing to me:

If you do not know or have reason to know based on readily accessible information the fair market value of your beneficial interest in the pension plan or deferred compensation plan on the last day of the year and you did not receive any distributions from the plan, the value of your interest in the plan is zero. In this circumstance, you should also use a value of zero for the plan in determining whether you have met your reporting threshold. If you have met the reporting threshold and are required to file Form 8938, you should report the plan and indicate that its maximum is zero.​
So here are my questions:


I know the current total balance, since I have gotten statements, but I have not yet received any distributions, and I don’t know how much they will be at retirement age (this depends on how well the money is investmented). So I’m not sure in this case what is considered to be “the fair market value of my beneficial interest”. Do I consider the value to be 0? In that case, I don’t meet the filing threshold (this pension account is the big account that would put me over the threshold). Is the fact that I have seen statements the deciding issue here?
I do list this pension on my FBAR, if that is significant, listing the current total balance.
If I do have to fill out Form 8938, do I understand correctly that I have to list all of the things (basic savings and investment accounts) that I also list on the FBAR?

Thanks for your help!


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## ForeignBody (Oct 20, 2011)

It sounds like you do know the pension value from your statements so it should be counted.

Yes, if you meet the requirement for filing 8938 you include all foreign financial accounts.


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## Carmonli (Jul 1, 2014)

Well, I'm finally getting around to actually filling out the forms, and I have some more questions:



I have always reported the entire amount of my compensation from my job (including employer deposits to my pension and another deferred savings account, both of which would need to be listed on Form 8938), and excluded the total amount with the FEIE. Do I have to report the growth in the account as interest and also list it on Schedule B? I haven’t done so in the past. Or do I just check the checkbox that says I haven’t reported any tax item for that specific account? Under what circumstances would a person NOT report a tax item?



I know the starting/ending balances, deposits and profit for my pension. So how do I determine “fair market value of my beneficial interest” in my pension? Is it the end of year balance? Or something else? I have not yet received any distributions from my pension – so would my beneficial interest be 0?

Any additional help will be greatly appreciated!


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## BBCWatcher (Dec 28, 2012)

Carmonli said:


> Do I have to report the growth in the account as interest and also list it on Schedule B?


When you say "growth," does it earn interest? I'm not quite sure whether you mean income deposited into the account or interest.



> So how do I determine “fair market value of my beneficial interest” in my pension? Is it the end of year balance?


Let's strike the word "pension" from this discussion. It's just confusing for these purposes. Form 8938 concerns itself with foreign financial accounts. It doesn't matter whether the accounts are intended to save for weddings, funerals, or holiday gifts (as examples).

The implication of your question is that you get statements indicating what your account's balance is. Yes, that's certainly a very straightforward way to measure the fair market value of your account.


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## AKIF.M (May 24, 2016)

BBCWatcher said:


> When you say "growth," does it earn interest? I'm not quite sure whether you mean income deposited into the account or interest.
> 
> 
> Let's strike the word "pension" from this discussion. It's just confusing for these purposes. Form 8938 concerns itself with foreign financial accounts. It doesn't matter whether the accounts are intended to save for weddings, funerals, or holiday gifts (as examples).
> ...


Carmonli,

Fair market value of account would be the the statement balance. Normally in cases where statement is not available or fair value is hard to determine, the best thing to report would be the last highest balance.


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## Carmonli (Jul 1, 2014)

Thanks everyone... one final question, please.

I get that I have to list the account (the amount would be the end of year balance shown on the statement). But what is a "tax item" with respect to this account (Part III on the form)? As I said, I haven't received any distributions from this account yet. Do I have a "tax item" only when I have a distribution from the account? How would that tax item appear on this form?


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## AKIF.M (May 24, 2016)

Carmonli said:


> Thanks everyone... one final question, please.
> 
> I get that I have to list the account (the amount would be the end of year balance shown on the statement). But what is a "tax item" with respect to this account (Part III on the form)? As I said, I haven't received any distributions from this account yet. Do I have a "tax item" only when I have a distribution from the account? How would that tax item appear on this form?


If you have not received any tax item for tax year then there is nothing to report. If a tax item is reported then it should be mapped to form 1040 as stated.


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