I was reading this page "Do I have to pay taxes on a large money transfer?" https://www.finder.com/irs-taxes-on-large-money-transfers
and I wasn't sure if it applies to me or not.
I transferred about $20,000 to S. Korea as an initial investment for a startup company (I am a US citizen). FYI this company didn't make any money last year (profit, dividend, etc.).
The above link explains the different types of cases where you have to pay taxes for a large money transfer but I couldn't find a case that applies to me.
I don't have a foreign account valued more than $10,000.
I didn't transfer my money as a gift so I didn't think I would have to fill out a Gift Tax Return (Form 709).
I didn't receive money from a person in another country.
The total value of all my foreign accounts and combined assets is not worth $50,000 or more.
And I don't own a business that sent $10,000 or more in cash payments, bank drafts, etc..
My question is do I have to fill out a form in my case?
Maybe. The following situations will determine if you are required to file a form to report the $20,000 that was transferred to Korea.
The website that you referenced pertains to foreign bank accounts. A Form 114, Report of Foreign Bank and Financial Accounts (FBAR) is only required if the total amount transferred is more than $10,000 in a calendar year. The purpose of the form is to prevent money laundering.
You indicated that you do not have a foreign bank account; therefore, the Form 114 does not apply to you. But, if you have signature authority over the foreign entity's financial account, then you will have to prepare the Form 114 to report the $20,000 transfer. The form cannot be filed with a tax return. It must be filed electronically through the Internal Revenue Service (IRS) BSA E-Filing System. The IRS does not provide a paper copy of the form.
If a person or entity transfers property (including cash)
to a foreign corporation, then they will have to complete a Form 926, Return
by a U.S. Transferor of Property to a Foreign Corporation. The transfer amount has to be $100,000 or more. It
appears the Form 926 is not applicable to your stated situation.
If
a person has a specified interest in a foreign
asset such as a:
(the list is not all inclusive) then they will file a Form
8938, Statement of Foreign Financial Assets if
they are required to file an income tax return, and they meet the Form 8938
filing status threshold, (e.g., for unmarried filers - $50,000 worth of assets at the end of the year,
or $75,000 worth of assets during the calendar year.
If
your investment was not worth the threshold amount(s), then you are not
required to submit a Form 8938. However, if your investment is considered a
specified interest in a foreign asset (refer to the link that I have provided),
and it was worth the threshold amount(s) for your filing status, then you
will need to submit the Form 8938.
TurboTax
does not support the Form 8938. You will need to prepare it outside of
TurboTax and attached it to a paper filed return.