NEW! Specified Foreign Financial Asset

New Internal Revenue Service regulations requires additional bank reporting if certain conditions are met.

IRS Form 8938 required for tax year 2011. – If the taxpayer has an interest in a Specified Foreign Financial Asset , Form 8938 must be filed attached to the taxpayer’s individual income tax return if certain financial criteria is met.  First, a taxpayer is considered to have an interest in a Specified Foreign Financial Asset if any income, gains, losses, deductions, credits, gross proceeds or distributions from the asset would be required to be reported on the taxpayer’s individual income tax return.

Form 8938 Reporting Thresholds:

 For a single or married filing separate taxpayer and is living in the USA, the financial asset must have a year-end balance/value of more than $50,000 or had been greater than $75,000 at any time during the year.  However, if the taxpayer is living abroad, the financial asset must have a year-end balance/value of more than $200,000 or had been greater than $300,000 at any time during the year.

For a married couple taxpayer filing jointly and is living in the USA, the financial asset must have a year-end balance/value of more than $100,000 or had been greater than $150,000 at any time during the year.  However, if the taxpayer is living abroad, the financial asset must have a year-end balance/value of more than $400,000 or had been greater than $600,000 at any time during the year.

The information to be reported on IRS Form 8938 included (if applicable):

Basic identification of the account/asset.  Name, address of financial institution where account   is held,

  • Name address of issuer or counterparty of stock, securities or financial instruments
  • Information of whether the asset was acquired or disposed of during the year.
  • The amount of income, gain  or other tax attributes recognized during the year and schedule.
  • Schedule, Form or return on which it was reported to the IRS.
  • Currency exchange rate and source rate, if not from Treasury’s Financial Management Service.