topic Unusual situation about FBAR in Deductions & credits

Unusual situation about FBAR

kleo123321 — Sun, 21 Mar 2021 22:12:28 GMT

I am a new US resident (green-card) for 3 years. And all this time, I went to the United States every six months to maintain my status. All this time, I also worked in Russia for the company and of course had accounts in Russia, since I live in Russia now. Now I found out about the FBAR and there were questions that I don't answer.

The fact is that in 2019 I was doing a loan refinancing. That is, I had a debt in a Russian bank for 40k dollars, and took a refinancing loan for 52k dollars. In the bank statement, it looks like this: 52k was credited, then 40k was written off in favor of the old loan and $12k remained. Then I withdrew the 12 thousand from the account and spent it on the needs of the family. So Is this credit's money issued as a loan considered to be subject to declaration in FBAR? If yes, then I need declare 52k or 12k?

Also in Russia, my employer every month put my salary to my salary card(Maybe it's only in Russia called like this. It's usual Visa card, where employer put my salary(this card has a bank account). . So Is this salary's money i considered to be subject to declaration in FBAR?

Also I have 2 credits cards in Russia. I don't know how this named in America. But I have credit card and there $5k limit which I don't use, but if I want, let's say I can use this money in supermarket. Do I need aggregate this money and calculate them, (as part of 10k FBAR rate)

Last question. I filled my declaration 1040 married jointly and my son is other dependent. If for the above reasons I need to file the FBAR, should I only do it for myself, or do I need to show my wife and son's accounts(they are also green card holders)? My wife and son have bank accounts in Russia since they live in Russia. But the accounts in the name of the wife do not have 10k, and the accounts of the son do not have 10k)

There are a lot of questions, sorry about that. But I really hope for your help. All tax agents refuse to consult, referring to the tax season.

Re: Unusual situation about FBAR

pk — Mon, 22 Mar 2021 03:01:29 GMT

@kleo123321 ,

FBAR looks at and considers ONLY "liquid" financial accounts -- so bank accounts is the main interest --- if the total amounts ( of all accounts) in any financial institution at anytime during the year equaled or exceeded US$10,000 then you should file the FBAR. The form is filed electronically and is applicable to all "US persons". Actually the limit is US$10,000 on the last day of the year or US$ 15,000 at anytime. But to me the safest is to report if at anytime US$10,000 or more. There is no tax on this but if you knowingly do not file the form , the penalties is very severe.

Ownership of an account --- either you own and operate or are a nominee, have no interest etc -- like when one has an account along with one's parents but really do not operate the account etc.

Financial institution general implies banks, credit unions etc -- could even be a brokerage where cash sits ready for investment.

In your particular case , based on your post -- you need to report the bank accounts but not the credit cards ( because it would be loan if you took advantage of it). I would also suggest that there is no harm in also reporting the accounts owned and operated by your spouse and child ( if he/she is an adult ).

There is also another requirement --FATCA -- this requires reporting of specified financial assets ( TurboTax will prepare this for you when you prepare your return ) - stocks, bonds , notes and similar things come under this ( but not real-estate ) and here the threshold is higher and depends on your filing status and tax home ( USA or abroad). Again TurboTax will walk you through this if you tell it that you have foreign assets etc.

Do you need more help on this ?

Re: Unusual situation about FBAR

kleo123321 — Mon, 22 Mar 2021 09:52:05 GMT

Thanks for your reply. But I still didn't fully understand. About this account for refinancing the loan. The bank reflects that I received 52k and 40k were debited on previous credit immediately, 12k remained, but this is also credit money. That is, all these 52k I have to return to the bank. Do I need to calculate them to 10k FBAR rate? If yes, in max.account.value should I put 52k or 12k?
Thanks for your help

Re: Unusual situation about FBAR

pk — Mon, 22 Mar 2021 18:30:36 GMT

@kleo123321 sorry for the confusion ---- the threshold for reporting is either at least US$10,000 on the last day of the calendar year or US$15,000 at anytime during the year. After that the form actually asks for the balance on the last day of the year ( if I remember right ). So in your case when you search for form 114 ( even google would do it ), it will take you to FinCen.gov and choose individual -- which will then take you to the BSA-e-filing site and let you file on-line or download the form , prepare and then comeback and submit the form. You just answer the questions posed and you are done --- the real interest for the FinCen is to connect all the foreign bank accounts to US persons who hole them -- they really don't care about the amounts in the account ( that is my view ). So in the referred bank account where you had a US$40,000 and then US$52,000 was deposited -- your maximum for year was US$ 92,000 and on the last day of the year you had US$12,000 after the US$40,000 debit. Don't worry, just answer the questions on the form 114 and you are done --- this is no a tax issue/event.

Does this help ?