Family Financial Connections archive
Date: August 2015
The IRS issued brand-new guidance requiring individuals with an interest in a “defined foreign financial possession” to connect a disclosure statement to your income tax return for any year where the aggregate value of all such possessions surpasses $50,000. Make use of new kind Type 8938 (Statement of Specified Foreign Financial Assets) starting in 2011.
Q. Exactly what is a monetary account?
A. A “financial account” includes:
o Bank, securities, securities derivatives or other financial instruments accounts.
o Savings, demand, checking, deposit or any other account maintained with a monetary organization.
o Accounts where the possessions are held in a commingled fund consisting of mutual funds
Q. Is an FBAR required for accounts preserved with monetary organizations located in a foreign country if the accounts hold noncash assets, such as gold or silver?
A. Yes. An account with a monetary institution that is located in a foreign country is a financial make up FBAR purposes whether the account holds cash or non-monetary properties.
Q. If you have 3 international monetary accounts with optimum account balances of $100, $12,000 and $3,000. Do you have to submit an FBAR? Do you have to report all 3 accounts?
A. Yes, because the aggregate value of international financial accounts X, Y and Z is $15,100. You need to report all 3 X, Y and Z even though 2 accounts have values below $10,000.
Q. If you possess two international monetary accounts with account balances of $3,000 and $8,000, do you have to submit an FBAR? Which accounts must be reported?
A. All three accounts, although no single account is over $10,000, since the aggregate value of accounts A, B and C is over $10,000.
Q. Is an FBAR required if the account does not generate interest or dividend income?
A. Yes, you must submit FBAR whether the international account produces any earnings.
Q. Does the term “other authority over a financial account” suggest that an individual, who has the power to direct how an account is invested however who can not make disbursements to the accounts, has to submit an FBAR?
A. No, an FBAR is not needed since the person has no power of personality of cash in the account.
Q. Exactly what are the exceptions to the FBAR filing requirement?
A. Accounts in US military banking facilities and an officer or staff member of a bank if the officer or worker has no personal monetary interest in the account.
Q. Does more than one FBAR kind need to be fileddeclared a husband and spousea couple owning a joint account?
A. No, one is sufficientsuffices offered that the names and Social Security varieties of the joint owners are totally disclosed.
Q. How long should account holders keep records of the foreign accounts?
A. Retain your records for a period of 5 years.
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Sy Al-os Accountancy Corporation supplies accounting and tax services to individuals, corporations, LLCs and company entities. The Firm has a specific niche in protecting taxpayers investigated by the IRS and other governmental firms. The firm celebrates its 38th anniversary in 2015.
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Victor Santos Sy finished Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic dealt with SyCip, Gorres, Velayo (SGV Andersen Consulting) and Ernst amp; Young prior to developing Sy Accountancy Corporation in 704 Mira Monte Location, Pasadena, CA 91101. He has 50 years of experience in accounting, consulting, and tax work.
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The Company happily welcomes Arlene Al-os in 2015. She obtained her bachelors of Science in Accountancy from Mindanao State University and MBA from Ateneo de Manila University. She teaches intermediate accounting at UCLA and was a teacher of Economics at Asia Pacific College. She has more than 15 years of experience consisting of member firms of KPMG and BDO Seidman accounting firms.
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