Foreign financial assets

REPORTING FOREIGN FINANCIAL ASSETS

 

U.S. nationals having financial products outside the U.S. have very specific filing obligations:

 

 

1. Form 8938 foreign financial assets

 

You need to report your specified foreign financial assets (such as financial accounts maintained by a foreign financial institution or interest in a foreign entity as well as your Bitcoin wallet value) if the total value of all such assets in which you have an interest is more than the appropriate reporting threshold:

 

  1. if you are filing as a single
    • on the last day of the tax year the threshold is $200,000; or
      • at any time during the tax year the threshold is $300,000

  1. if you are married and filing jointly
    • on the last day of the tax year the threshold is $400,000; or
      • at any time during the tax year the threshold is $600,000.

 

Note:

If you do not have to file an income tax return for the tax year, you do not have to file Form 8938.

Filing the Form 8938 does not relieve you of the requirement to file the Form F114 (FBAR).1 if you are otherwise required to file the FBAR.

 

 

 

2. Form 8621 (PFIC) offshore investment vehicles

 

The Netherlands is sometimes known as a 'low tax country', but it is not advisable for U.S. citizens to use the Netherlands for offshore investments (i.e. keeping money in a jurisdiction other than one's country of residence meant to red. The American government may fine U.S. citizens who invest in offshore vehicles in the Netherlands or elsewhere.

 

more on PFIC

 

 

3. FBAR Non-US investment accounts

 

U.S. nationals also need to disclose their foreign bank accounts directly to the U.S. Department of the Treasury if the total of all your accounts combined exceeded $10,000 at any given moment during the year. If so, then all accounts, even the accounts with a nil balance, need to be reported on this Form.

 

The Form F114 (FBAR) is not filed with the Tax return but is directly filed with the US Department of the Treasury. It can only be filed electronically.

 

more on FBAR

 

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