Don’t Forget About FBAR
The Foreign Account Tax Compliance Act “FATCA” isn’t the only regulation with which taxpayers with foreign assets may need to comply. Some will also need to report these assets on what’s known as the “FBAR,” or Form 114, “Report of Foreign Bank and Financial Accounts.”
The FBAR typically comes into play if an individual or entity, such as a trust or estate, has a financial interest or signing authority over an offshore financial account(s), and the total value of all foreign financial accounts exceeded $10,000 at any time during the calendar year. What’s more, an FBAR may need to be filed even if the account hasn’t produced any taxable income during the year.
It’s possible that a foreign account will need to be reported on both Form 8938 and Form 114, though the information required on each may differ slightly. Form 114 should be filed electronically by June 30 — it’s not filed with your federal tax return like the Form 8938.
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