IRS Form 8938 Filing Requirements
U.S. taxpayers meeting the valuation threshold for specified foreign financial assets are required to file Form 8938. Depending on tax filing status, place of residence, and total asset values both throughout the tax year and on the last day of the tax year, the reporting threshold ranges from $50,000USD to $600,000USD.
Assets included in the valuation are financial accounts maintained by a foreign financial institution (FFI), as well as the following assets held for investment purposes and not maintained by a FFI: stocks, securities, financial instruments, contracts and interests in foreign entities or persons. The exception to this being assets that qualify as being used or held for use in connection with an actively conducted trade or business.
All qualifying assets must have a maximum fair market value calculated in U.S. dollars for the tax year, in addition to a fair market valuation for the last day of the tax year, utilizing the appropriate foreign exchange rate as listed by the Treasury Department’s Financial Management Service. Special rules apply when calculating the value of foreign trust interests.
Given the severity of the penalties associated with failing to file Form 8938 when required, it is important to have a resource such as Moskowitz LLP to help you identify if you possess qualifying assets, calculate their fair market value and determine your reporting threshold.
Additional information regarding Form 8938 - Statement of Specified Foreign Assets can be found here: