New Foreign Financial Account Reporting Rules Pending
Those of you who deal, annually, with the “foreign financial account” reporting rules will have yet a new form to deal with soon.
IRS recently released a draft of new Form 8938, Statement of Specified Foreign Financial Assets. For tax years beginning after March 18, 2010, the “Hiring Incentives to Restore Employment Act of 2010” (so-called “HIRE Act”) requires that folks with an interest in a “specified foreign financial asset” during the tax year must attach a disclosure statement to their income tax return for any year in which the aggregate value of all such assets equals or exceeds $50,000.
“Specified foreign financial assets” are:
- Depository or custodial accounts at foreign financial institutions, and
- To the extent not held in an account at a financial institution:
- Stocks or securities issued by foreign persons,
- Any other financial instrument or contract held for investment that is issued by or has a counterparty that is not a U.S. person, and
- Any interest in a foreign entity.
A pretty broad standard.
The draft Form 8938 was released on June 22, 2011 — without instructions (nice). Hopefully, instructions will be forthcoming soon.
On a favorable note, Part II of the draft form notes that specified foreign financial assets that have been otherwise reported on Forms 3520, 3520-A, 5471, 8621 or 8865 do not have to be included on Form 8938.
Thank goodness for small blessings.
