By Phil Rarick, Weston Estate Planning Attorney
This report is a reminder that the FBAR or Report of Foreign Bank and Financial Account is due June 30. The FBAR is required for U.S. persons having a financial interest or signature authority over one or more foreign financial accounts, including a bank account, brokerage account, mutual fund, trust, estate, pension, cash value life insurance, or other type of foreign financial account having an aggregate value over $10,000 at any time during 2015.
Note: A U.S. person may have a reporting obligation even though the foreign financial account does not generate any taxable income.
The following is a helpful comment from a recent Forbes article:
U.S. law requires U.S. persons to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. Note that, by statute, these FBAR provisions apply to all U.S. persons and are not limited by the residency of the person since the laws of the U.S. are applicable to all U.S. citizens, U.S. residents, entities, including but not limited to, domestic corporations, partnerships, or limited liability companies created or organized in the U.S. or under the laws of the U. S., and trusts or estates formed under the laws of the United States. See Forbes, Reminder: FBAR Electronic Filing.
Summary of Disclosure/Reporting Requirements for Off-Shore Assets
Here is a quick overview of the most common filing requirements for off-shore assets as reported in attorney Alan Gassman’s Thursday Report:
- Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts
When Required: If a U.S. person: (1) creates or transfers money or property to a foreign trust; (2) receives (directly or indirectly) any distributions from a foreign trust or; (3) receives certain gifts or bequests from foreign persons, estates or other entities.
- Form 3520-A: Annual Information Return of Foreign Trust with U.S. Owner
When Required: By any U.S. person who is treated as an owner of any portion of a foreign trust under the grantor trust rules.
- Form 8938: Statement of Specified Foreign Financial Assets
When Required: If U.S. person has interests in certain specified foreign financial assets exceeding $50,000 on the last day of the tax year, or $75,000 at any time during the year ($100,000 and $150,000 respectively for taxpayer Married Filing Jointly).
- FBAR: Report of Foreign Bank and Financial Accounts
When Required: If a U.S. person has (1) financial interest or signature authority over one or more foreign financial accounts, and (2) the aggregate value of such accounts exceeded $10,000 at any time during the calendar year.
- Form 5471: Information Return of U.S. Persons with Respect to Certain Foreign Corporations
When Required: Generally required for U.S. persons who are officers, directors, or shareholders in certain foreign corporations.
- Form 8865: Return of U.S. Persons with Respect to Certain Foreign Partnerships
When Required: To report information regarding foreign partnerships controlled by a U.S. person; transfers from a U.S. person to a foreign partnership; or to report acquisitions, dispositions or changes in foreign partnership interests by a U.S. person.
More Information
For a good summary of Voluntary Disclosure of Offshore Assets see two recent articles by attorneys Alan Gassman, Lesley Share and Brandon Ketron as reported in Alan Gassman’s Thursday Report:
Voluntary Disclosure of Offshore Assets: Part I
Voluntary Disclosure of Offshore Assets: Part II
Special Note
The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston estate planning attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.