Foreign Asset Reporting

As an expat living abroad,  it is likely that at some point you will open foreign bank accounts or own foreign financial assets such as foreign mutual funds, pensions, and life insurance schemes, that need to be reported. Likewise, if you live in the US  and have  foreign financial assets and accounts, they may also need to be reported. This also includes green card holders and certain visa holders.

Depending on the nature of these assets and accounts, they may or may not trigger a tax obligation in the US. However, as a US citizen, even if your assets do not generate any US tax, you are still required to report all foreign financial assets and accounts once their aggregate value reaches certain thresholds. Failure to do so may result in  severe fines. We can help you report these assets and keep you compliant with FATCA.

Typical questions we often answer:

  • When do I need to disclose my foreign accounts?
  • Besides bank accounts, what else do I need to report?
  • How do I report my other assets I have abroad?
  • I own foreign mutual funds. Are they considered PFICs?
  • How do I report my PFICs?
  • What are the tax implications of owning foreign real estate?
  • How do I report my foreign pension?
  • I have interest in a foreign corp or partnership. Do I have to report?
  • Do I need to report asset transfers to accounts abroad?
  • What exchange rates should I use?
There are two different reporting mechanisms, depending on the type and value of your assets abroad:

FBAR (Form FinCen114)

Foreign Bank Account Report

An FBAR has to be submitted if the combined value of all your foreign bank accounts exceeds $10,000 at any point in time  during the tax year. FBAR is filed separately from your tax return to the Department of the Treasury.

Form 8938

Statement of Specified Foreign Financial Assets

The threshold for Form 8938 varies depending on your situation, starting at $50,000 for US based taxpayers and $200,000 for US expats. It is filed as part of your tax return.

Foreign asset reporting is an important part of US tax obligations but often overlooked by US citizens abroad. We can help you determine if you have to report foreign assets and prepare the appropriate forms for you.