FAQs - FBAR (Foreign Bank Account Reporting)

The annual due date for filing Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts is April 15.  This date change was mandated by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law 114-41 (the Act).  Specifically, section 2006(b)(11) of the Act changes the FBAR due date to April 15 to coincide with the Federal income tax filing season. To implement the statute with minimal burden to the public and FinCEN, FinCEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year (please note that this may change in future years).

A specified individual is:

• A U.S. citizen
• A resident alien of the United States for any part of the tax year (see Pub. 519 for more information)
• A nonresident alien who makes an election to be treated as a resident alien by filing a joint income tax return

A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico (See Pub. 570 for definition of a bona fide resident)

Specified foreign financial assets include the following:

• Financial accounts maintained by a foreign financial institution
• The following foreign financial assets if they are held for investment and not held in an account maintained by a financial institution:
• Stock or securities issued by someone that is not a U.S. person (including stock or securities issued by a person organized under the laws of a U.S. possession)
• Any interest in a foreign entity
• Any financial instrument or contract that has an issuer or counterparty that is not a U.S. person (including a financial contract issued by, or with, a counterparty that is a person organized under the laws of a U.S. possession).

You must file Form 8938 if:

You are a specified individual (U.S. tax resident) and you have an interest in specified foreign financial assets required to be reported. In addition, the aggregate value of your specified foreign financial assets is more than the reporting thresholds that apply to you:

Specified individuals living in the U.S.:

• Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.
• Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

 

Specified individuals living outside the U.S.:

• Unmarried individual (or married filing separately): Total value of assets was more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.

Married individual filing jointly: Total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.

Type of Account Form 8938 FBAR Financial (deposit and custodial) accounts held at foreign financial institutions Yes Yes Financial account held at a foreign branch of a U.S. financial institution No Yes Financial account held at a U.S. branch of a foreign financial institution No No Foreign financial account for which you have signature authority No, unless you otherwise have an interest in the account as described above Yes, subject to exceptions Foreign stock or securities held in a financial account at a foreign financial institution The account itself is subject to reporting, but the contents of the account do not have to be separately reported The account itself is subject to reporting, but the contents of the account do not have to be separately reported Foreign stock or securities not held in a financial account Yes No Foreign partnership interests Yes No Indirect interests in foreign financial assets through an entity No Yes, if sufficient ownership or beneficial interest (i.e., a greater than 50 percent interest) in the entity. Foreign mutual funds Yes Yes Domestic mutual fund investing in foreign stocks and securities No No Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor Yes, as to both foreign accounts and foreign non-account investment assets Yes, as to foreign accounts Foreign-issued life insurance or annuity contract with a cash value Yes Yes Foreign hedge funds and foreign private equity funds Yes No Foreign real estate held directly No No Foreign real estate held through a foreign entity No, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate No Foreign currency held directly No No Precious Metals held directly No No Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles No No “Social Security”- type program benefits provided by a foreign government No No

The following financial accounts and the assets held in such accounts are not specified foreign financial assets and do not have to be reported on Form 8938:

·         A financial account that is maintained by a U.S. payer, such as a domestic financial institution. In general, a U.S. payer also includes a domestic branch of a foreign bank or foreign insurance company and a foreign branch or foreign subsidiary of a U.S. financial institution.

Examples of financial accounts maintained by U.S. financial institutions include: U.S. mutual funds accounts, IRAs (traditional or Roth), Section 401(k) retirement accounts, Qualified U.S. retirement plans and Brokerage accounts maintained by U.S. financial institutions.

·         A financial account that is maintained by a dealer or trader in securities or commodities if all of the holdings in the account are subject to the mark-to-market accounting rules for dealers in securities, or an election under section 475(e) or (f) is made for all of the holdings in the account.

·         There are also exceptions for duplicative reporting (Forms 3520, 5471, 8621, 8865).

Generally, all foreign accounts for which you have a financial interest or signature authority will need to be reported on the FBAR, as long as the combined total exceeds $10,000 at any time during the year. In addition, these accounts are required to be reported on Form 8938 if they exceed the following thresholds:

Specified individuals living in the U.S.:

• Unmarried individual (or married filing separately): If the total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.
• Married individual filing jointly: If the total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

Specified individuals living outside the U.S.:

• Unmarried individual (or married filing separately): If the total value of all assets was more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.
• Married individual filing jointly: If the total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.

All income from foreign accounts in which you have a financial interest must be reported on your individual tax return.