Schedule B, Part III
U.S. citizens and resident aliens must report income from all worldwide sources, including income from foreign trusts and foreign bank and securities accounts. Generally, taxpayers who have income from foreign financial accounts need to complete and attach Schedule B to their returns. Part III of Schedule B, Foreign Accounts and Trusts, asks about foreign financial account, such as if the taxpayer had a financial interest in or signature authority over a financial account located in a foreign country, if he is required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report it, and if he received a distribution from, were the grantor of, or transferor to, a foreign trust.
Below is a sample of an actual FBAR information required for an account in your name only, at Barclays in London, and that reached a maximum value of $15,000 during the tax year.
FinCEN Form 114, Report of Foreign Bank and Financial Accounts
If U.S. citizens and resident aliens have a financial interest in or signature authority over foreign financial accounts and the aggregate value of those accounts is more than $10,000 at any time during the tax year, they are required to file FinCEN Form 114. They must electronically file FinCEN Form 114 with Treasury’s Financial Crimes Enforcement Network.
The due date of filing FinCEN Form 114 is April 15 (October 15 with a six-months automatic extension). Do not attach FinCEN Form 114 to the tax return.
Form 8938, Statement of Specified Foreign Financial Assets
Taxpayers may be required to file Form 8938, Statement of Specified Foreign Financial Assets, with their tax return, no matter whether they are required to file Form FinCEN Form 114. Failure to do so may result in penalties and extension of the statute of limitations. e due date (including extensions) for that return.
In general, U.S. citizens, resident aliens, and certain nonresident aliens living in the United States must file Form 8938 if the total value of the foreign financial assets is greater than $50,000 ($100,000 for Married Filing Jointly) on the last day of the tax year or greater than $75,000 ($150,000 for Married Filing Jointly) at any time during the tax year.
If the taxpayer does not have to file his income tax return for the tax year, he does not have to file Form 8938. Even if the total value of the taxpayer’s foreign financial assets is more than the reporting threshold, he will not be required to file Form 8938.
Filing Form 8938 does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114.
Form 8938 cannot be sent to the IRS by itself. Taxpayers must attach Form 8938 to the federal tax return and file by the due date (including extensions) for that return.