July 10, 2012
New Foreign Asset Disclosure Requirement
As part of its initiative to increase the clarity of foreign assets held by US persons, the IRS now requires that individual taxpayers complete Form 8938 with their tax returns, beginning with the 2011 tax year. Note that this is separate and distinct from a taxpayer’s obligation to file Form TDF 90-22.1 – Report of Foreign Bank and Financial Accounts.
- Who does this apply to? Individual taxpayers who have an interest in specified foreign financial assets above the reporting thresholds; At this time, entities are exempt from this filing
- What are specified foreign financial assets? Accounts at foreign financial institutions, securities issued by foreign persons, and direct interests in foreign entities
- What are the reporting thresholds? For Single/Married Filing Joint taxpayers, either1) $50K/$100K on the last day of the tax year or2) $75K/$150K at any time during the tax year
- What are the penalties for not filing? $10,000 plus possible accuracy-related and continuing failure to file penalties
Please click here for more information on the exact reporting requirements. We will review each client’s documents and prepare Form 8938 accordingly. If you have any questions, we welcome the opportunity to speak with you.
In response to our clients’ ever increasing out of state activity, we are pleased to announce the opening of our newest office in Reno, Nevada, effective July 20, 2012. Eichstaedt & Lervold will be a registered Nevada CPA firm. Our Nevada contact information is:
Eichstaedt & Lervold, LLP
200 South Virginia, 8th Floor
Reno, NV 89501