Jason, Thank you very well explained. Very Impressive. Amazing. Do you prepare taxes? If so where are you located? Quick questions if I may: If I was gifted shares in a foreign entity by a non resident US person (parent), I am assuming on line 12: Were any foreign assets acquired or sold during the tax year would be "Yes"? Even though I did not buy them, but inherited them? Also in part VI: Date Asset acquired during the tax year..will be the year I got them?
Yes! If you acquire a foreign financial asset by gift, you should still report those assets on your Form 8938. The date acquired is the date you were gifted the shares. You might also need to file an IRS Form 3520 if the value of the gift was over the relevant thresholds. Form 3520 is generally filed to report interests in foreign trusts. However, it is also filed by U.S. persons when they receive gifts from nonresidents.
Testing my knowledge here 🙂 If I do report the same shares in 8938 and 3520 the year I was gifted, will that be considered duplicative reporting? Or better to report both, the year received to be on the safe side?
Really good video. Love that you were showing the form. Too many TH-cam videos don't do that. I have a question on IRS Form 8938 that I was hoping you could shed some light on. Context (fictitious): I have profit, loss, and capital interest in a foreign entity that is a partnership for U.S. Income Tax purposes. I received a Form 1065 K-1 from this partnership for tax year 2021. The partnership does business in three foreign countries and provided me with the highest value per quarter for 3 currencies. My questions are - 1. Do I have to report that partnership 3 times on Part VI of Form 8938? 2. Do I report "3" on Form 8938 > Part II > line-10? I think "yes" to both questions as the partnership may/can/possibly has bank accounts and income from 3 different foreign countries. As such, I, as an individual, indirectly have 3 accounts in 3 different countries. Would love to know your thoughts. Thank you for your time.
No. There is only one partnership, not three. Report the highest value during the year and if that value is given in USD, use that. If not, then use the exchange rate at the end of the year to convert from the currency given into USD, so it would be the highest value x end of year exchange rate into USD.
Hi Jason, thank you for the great video, super helpful. Question: if I have a PFIC bought through a custodial account, do I only keep the custodial account in Form 8938 and then report the PFIC itself on Form 8621?
I have already e-filed my 2023 tax return. If I now decide to file 8938, do I send it by postal mail along with copy of e-filed Federal tax return (1040) and W2 ?
Jason, I have a few questions / clarifications regarding Part III of 8938; - If, I understand correctly; any bank accounts, bank / financial institutions interests, taxes paid (credit), will be reported under Part III 13 right? - And Part III 14 is exclusive for Stocks, Mutual Funds, Index Funds (basically stock market) is this correct? Also, where do you get Part III - Where reported (d) Form and line (e) Schedule and line information? for both 13 & 14 section?
Jason, thank you. Question if the taxpayer's spouse is the only owner, is there a way like the FBAR to show that the spouse is the only owner of the account?
I have a brokerage account with company stocks, and pfics. I filed a statement for each stock and a 8621 for each pfic. should i also fill a 8938 p6 for each pfic? can I use the brokerage account as a vehicle and simply declare it as a custodial account with the total value of all stocks and pfics, and then complete with a 8621 for each of the pfics?
What happens if there are more than one name on the foreign bank or brokerage account (not between spouses)? Three examples. For example, one account may be simply the US taxpayer's money but another, nonresident alien, say a sibling in that foreign country, has her name on the account as well for convenience sake to have signature rights. I assume the full highest value goes on the 8938. #2. What about if there is a situation where 3 siblings' names (including the US taxpayer) are on another foreign bank account, say 60K GBP highest value, each with equal interests. Do you report just $20K GBP on the 8938, or the full $60K GBP even though the beneficial interest is only 1/3. Finally, #3. I am assuming if the taxpayer (TP) has signing rights on a foreign account but no beneficial interest, that such an account, even though it has TP's name on it, that such account is not required to be reported on form 8938, correct?
Hi Jason, thank you for the video! just a question.. If I have a bank deposit account, what it is going to be taxes are the interest earned on the bank deposit, not the balance itself, right?
Great video, nicely explained. However, the presence abroad test is confusing, well not the test but what if you do not meet the requirements, what are the thresholds then. My wife and I, both dual Citizens, moved back to the UK last May. We had $120,000 maximum in a UK checking account and at the end of the year $95,000. Is the threshold therefore the same as living in the US?
Hi, thanks for the video! I have a checking account, saving account and a life-insurance, all under the same bank. Is that considering as 3 into deposit account in part I section 5 ?
Jason, Thanks for th video. I noticed your form is based on 2020. The 2021 form is a bit different, but similar. My question is where do I find continuation forms. When I go to the IRS they only provide the first 2 forms. Thanks.
If you have more than one account and need continuation forms, you simply use multiple copies of Page 2 and attach them all behind Page 1 of the Form 8938. The instructions stipulate that if you have more than one account or asset that must be reported in Part V or Part VI, make additional copies of Page 2 and attach them to your Form 8938.
Thanks for the video, Jason. I got a couple of things I'd like you to clarify: 1. Because John owns stock in a mutual fund (a foreign trust), does he also need to file a FORM 3520 (or 3520-A) because "he is an owner of a foreign trust"? 2. If mutual funds were purchased through a custodial account (e.g., through a bank's investment account), is this filed under Other Foreign Assets or Custodial Accounts?
On #2, I would say under Custodial Assets because the foreign mutual fund is contained within custodial account. Now if that custodial account is a US-based custodial account holding a foreign mutual fund, I would say no reporting on 8938 is required at all, akin to owning foreign stocks within a US brokerage account. It has to be a foreign custodial account. On #1, A foreign mutual fund would not be considered a foreign trust for purposes of form 3520. They are talking about a trust that is controlled by someone.
Thanks for this helpful video. If you have a brokerage holding account for shares, do you need to fill out one continuation form for each company set of shares (mine has 3 companies 1 was given out instead of dividend), or do put all in one?
If you hold stocks through a foreign broker acting as the custodian, you generally just report the account balances in total with the foreign custodian.
Hi Jason, should I and my wife who are filing jointly need to file one combined form 8938? We have separate foreign accounts. Do we need to add all our accounts for evaluating against thresholds?
For a married filing joint couple, they would complete one Form 8938 and report all of their foreign financial assets on the one Form 8938 together with their joint Form 1040.. The thresholds for filing are per the IRS Form 8938 instructions. Married taxpayers filing a joint tax return and live in the U.S., the reporting threshold is more than $100k on the last day of the tax year or more than $150k at any point during the tax year. Married taxpayers filing a joint tax return when they live OUTSIDE of the U.S. need to file when their foreign financial assets are more than $400k on the last day of the tax year, or more than $600k at any point during the year.
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Jason, Thank you very well explained. Very Impressive. Amazing. Do you prepare taxes? If so where are you located?
Quick questions if I may:
If I was gifted shares in a foreign entity by a non resident US person (parent), I am assuming on line 12: Were any foreign assets acquired or sold during the tax year would be "Yes"? Even though I did not buy them, but inherited them?
Also in part VI: Date Asset acquired during the tax year..will be the year I got them?
Yes! If you acquire a foreign financial asset by gift, you should still report those assets on your Form 8938. The date acquired is the date you were gifted the shares. You might also need to file an IRS Form 3520 if the value of the gift was over the relevant thresholds. Form 3520 is generally filed to report interests in foreign trusts. However, it is also filed by U.S. persons when they receive gifts from nonresidents.
@@JasonDKnott Thank you Sir, much appreciated.
On a side note do you offer tax services?
Testing my knowledge here 🙂
If I do report the same shares in 8938 and 3520 the year I was gifted, will that be considered duplicative reporting? Or better to report both, the year received to be on the safe side?
General presentation rule - do not use an acronym or abbreviation without definition the first time. Unless it is WIDELY known.
Really good video. Love that you were showing the form. Too many TH-cam videos don't do that. I have a question on IRS Form 8938 that I was hoping you could shed some light on.
Context (fictitious): I have profit, loss, and capital interest in a foreign entity that is a partnership for U.S. Income Tax purposes. I received a Form 1065 K-1 from this partnership for tax year 2021. The partnership does business in three foreign countries and provided me with the highest value per quarter for 3 currencies.
My questions are -
1. Do I have to report that partnership 3 times on Part VI of Form 8938?
2. Do I report "3" on Form 8938 > Part II > line-10?
I think "yes" to both questions as the partnership may/can/possibly has bank accounts and income from 3 different foreign countries. As such, I, as an individual, indirectly have 3 accounts in 3 different countries.
Would love to know your thoughts. Thank you for your time.
No. There is only one partnership, not three. Report the highest value during the year and if that value is given in USD, use that. If not, then use the exchange rate at the end of the year to convert from the currency given into USD, so it would be the highest value x end of year exchange rate into USD.
@@1228maxi Thank you. One real life translation of this - An SFFA having business in more than one country.
@Jason, please share these sample pdfs in the description, it will create much better understanding
Hi Jason, thank you for the great video, super helpful. Question: if I have a PFIC bought through a custodial account, do I only keep the custodial account in Form 8938 and then report the PFIC itself on Form 8621?
I have already e-filed my 2023 tax return. If I now decide to file 8938, do I send it by postal mail along with copy of e-filed Federal tax return (1040) and W2 ?
Jason, I have a few questions / clarifications regarding Part III of 8938;
- If, I understand correctly; any bank accounts, bank / financial institutions interests, taxes paid (credit), will be reported under Part III 13 right?
- And Part III 14 is exclusive for Stocks, Mutual Funds, Index Funds (basically stock market) is this correct?
Also, where do you get Part III - Where reported (d) Form and line (e) Schedule and line information? for both 13 & 14 section?
Hi Jason, great video! What about the money I borrowed from my friend that was deposited in my foreign bank account?
Jason, thank you. Question if the taxpayer's spouse is the only owner, is there a way like the FBAR to show that the spouse is the only owner of the account?
Hi Jason, what about part 4? "you do not need to include these assets in the 8938 for the tax year" then why do you include the pfic ?
I have a brokerage account with company stocks, and pfics. I filed a statement for each stock and a 8621 for each pfic.
should i also fill a 8938 p6 for each pfic?
can I use the brokerage account as a vehicle and simply declare it as a custodial account with the total value of all stocks and pfics, and then complete with a 8621 for each of the pfics?
What happens if there are more than one name on the foreign bank or brokerage account (not between spouses)? Three examples. For example, one account may be simply the US taxpayer's money but another, nonresident alien, say a sibling in that foreign country, has her name on the account as well for convenience sake to have signature rights. I assume the full highest value goes on the 8938. #2. What about if there is a situation where 3 siblings' names (including the US taxpayer) are on another foreign bank account, say 60K GBP highest value, each with equal interests. Do you report just $20K GBP on the 8938, or the full $60K GBP even though the beneficial interest is only 1/3. Finally, #3. I am assuming if the taxpayer (TP) has signing rights on a foreign account but no beneficial interest, that such an account, even though it has TP's name on it, that such account is not required to be reported on form 8938, correct?
Hi Jason, thank you for the video! just a question.. If I have a bank deposit account, what it is going to be taxes are the interest earned on the bank deposit, not the balance itself, right?
Great video, nicely explained. However, the presence abroad test is confusing, well not the test but what if you do not meet the requirements, what are the thresholds then.
My wife and I, both dual Citizens, moved back to the UK last May. We had $120,000 maximum in a UK checking account and at the end of the year $95,000. Is the threshold therefore the same as living in the US?
Hi, thanks for the video! I have a checking account, saving account and a life-insurance, all under the same bank. Is that considering as 3 into deposit account in part I section 5 ?
Jason, Thanks for th video. I noticed your form is based on 2020. The 2021 form is a bit different, but similar. My question is where do I find continuation forms. When I go to the IRS they only provide the first 2 forms. Thanks.
If you have more than one account and need continuation forms, you simply use multiple copies of Page 2 and attach them all behind Page 1 of the Form 8938. The instructions stipulate that if you have more than one account or asset that must be reported in Part V or Part VI, make additional copies of Page 2 and attach them to your Form 8938.
Thanks for the video, Jason. I got a couple of things I'd like you to clarify:
1. Because John owns stock in a mutual fund (a foreign trust), does he also need to file a FORM 3520 (or 3520-A) because "he is an owner of a foreign trust"?
2. If mutual funds were purchased through a custodial account (e.g., through a bank's investment account), is this filed under Other Foreign Assets or Custodial Accounts?
On #2, I would say under Custodial Assets because the foreign mutual fund is contained within custodial account. Now if that custodial account is a US-based custodial account holding a foreign mutual fund, I would say no reporting on 8938 is required at all, akin to owning foreign stocks within a US brokerage account. It has to be a foreign custodial account.
On #1, A foreign mutual fund would not be considered a foreign trust for purposes of form 3520. They are talking about a trust that is controlled by someone.
For Sprott Gold Trust shares (a PFIC) held in a US brokerage would one need to complete Form 8938 (assuming the threshold is met) or only Form 8621?
You would still need to file Form 8938 if the reporting thresholds were met for the tax year, as the PFIC investment is a foreign financial asset.
Thanks for this helpful video. If you have a brokerage holding account for shares, do you need to fill out one continuation form for each company set of shares (mine has 3 companies 1 was given out instead of dividend), or do put all in one?
If you hold stocks through a foreign broker acting as the custodian, you generally just report the account balances in total with the foreign custodian.
@@JasonDKnott Thank you.
@@JasonDKnott Do you know if I should list the bank as the custodian or the company they are linked to that holds the stock?
Hi Jason, should I and my wife who are filing jointly need to file one combined form 8938? We have separate foreign accounts. Do we need to add all our accounts for evaluating against thresholds?
For a married filing joint couple, they would complete one Form 8938 and report all of their foreign financial assets on the one Form 8938 together with their joint Form 1040.. The thresholds for filing are per the IRS Form 8938 instructions. Married taxpayers filing a joint tax return and live in the U.S., the reporting threshold is more than $100k on the last day of the tax year or more than $150k at any point during the tax year. Married taxpayers filing a joint tax return when they live OUTSIDE of the U.S. need to file when their foreign financial assets are more than $400k on the last day of the tax year, or more than $600k at any point during the year.
Thanks Jason. So should we specify both our names in the form 8938? It only allows for 1 TIN.