Hi,
I have a unique situation - my wife and I live in US, both residents, she is Norwegian and her parents live in Norway. Now, her father has his small business over there in her name (<100k), due to credit issues in the past he couldn't get business loans he needed to survive and this little money is really his life savings that will be his retirement supplement, hence me and my wife never have taken nor will take a penny from it, i.e. no tax impact here whatsoever. In fact, my wife has sign an agreement with him to transfer/gift the share title prior to coming to US (2019), but apparently the negotiation procedure between the banks and the father hasn't been completed till this year. Long story short she still is the owner of the share account.
Now, we never reported 8938 because the value of the shares since 2019 when she became a US residence, was always between 50-95k never exceeding the threshold of 100k MFJ. However we never knew that this was suppose to be reported on FBAR for informational purposes if the account is over 10k, partially because out of ignorance and in all honestly, it is not and never will be our money. She has never had proceeds in her bank account from this venture. Parents are living off of it.
This year, we received a bank letter from there about some small stock sale proceeds around $2400 USD that were held in the company`s name and sold by her father but since she is the legal share owner with US address residence (even though never has input in the company nor any proceeds come to her personal account), my assumption is we need to report this here somehow, since it has been sent to IRS as part of fatca/crs terms, which brings me to couple of more questions:
1) Do we need to go back and file late FBARs/finFINCENcen 114 to state the amount of the foreign share even tho is under 100k (but over 10k). My understanding is yes, even though 8938 is not applicable but fincen wi US treasury is?
2) Will this cause penalties since its late even though is really non willful and completely innocent admin mistake, not to mention there is no tax impact nor ever will be in US (eventually will be transferred to her dad once he retires this year, something that should have been done 3yrs ago but it was backed up on their side)
Confused how to disclose this in what forms exactly.
Any help or advice is appreciated.
Thanks
