Do I need to report a foreign bank account that belongs to a credit card? Should I count available credit line towards $10 000 / $100 000 when asked by TurboTax?

[koulslou]

I have an account in a foreign bank where, among other, I have a sub-account for a credit card. Should it be reported and/or counted towards $10 000 / $100 000 questions?

[DS30]

Yes you will report a foreign bank account. However, you will not report any foreign credit card accounts on your FBAR. You will just report the maximum daily balance of the foreign bank account that it is associated with credit card but not the credit card activity or the available credit on the foreign credit card.

So say you have a foreign bank account with HSBC and they also issued you a credit card. You would only report the actual foreign bank account information on your FBAR but none of the credit card information.

Regarding your FBAR requirement -

If you have foreign bank accounts, you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) if are a US citizen or resident and::

1. you had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

Foreign financial accounts consist of all foreign financial accounts that you own separately or jointly or for which you have signatory authority over (such as a foreign business account that is owned by the business but for which you can sign checks or redirect funds).

To be directed to the US Treasury Government Website to prepare a Report of Foreign Bank and Financial Accounts, click FBAR (TurboTax does not support this form)

[koulslou]

Which value should be taken into account: total available credit line or part of the credit line that was used?

[DS30]

Neither - you will not include your credit card on your FBAR. Only any money in an actual foreign bank account is included on FBAR. Credit card balances are debt not assets.

[Afrim]

I have foreign bank with a credit card associated with it.

When do I need to report my foreign bank account which has a credit card associated with it? 

When the line of credit is $10,000, when the savings account has $10,000, both or do I have to report the savings account regardless of total asset value?

[KurtL1]

You only report the Savings Account Balance. The Line of Credit does not need to be reported.

[Helen123]

Hi 

Thanks for the explanation above. I have two quick questions.

1. The example above mentions the bank account and credit card from the same organisation. If I have credit card account from company A and bank account from company B. I use the bank account to payback the credit card from company A. Based on my understanding, we only need to report the bank account from B and do not need to report the credit card account from A or anything about A to Fbar.

2. I assume we do not need to report the credit card account A in both Fbar and form 8938.

Please correct me if my understanding is wrong. Thanks. 

[DavidD66]

You are correct.  Credit card balances and credit limits are not reported on FBAR or Form 8938.

[Helen123]

Excellent, many thanks. So, both are correct, right?

[HopeS]

Yes, you do not report Credit cards on the FBAR or Form 8938.

Specified foreign financial assets include the following assets. 1. Financial accounts maintained by a foreign financial institution. 2. The following foreign financial assets if they are held for investment and not held in an account maintained by a financial institution. a. Stock or securities issued by someone that is not a U.S. person (including stock or securities issued by a person organized under the laws of U.S. possession). b. Any interest in a foreign entity. c. Any financial instrument or contract that has an issuer or counterparty that is not a U.S. person (including a financial contract issued by, or with a counterparty that is, a person organized under the laws of a U.S. Possession).

Please review page 7/16 of the IRS instruction for Form 8938 for a more complete list of foreign-specified financial assets.

Form 8938 Instruction

Also, review the link below:

Form 8938

To prepare Form 8938 in TurboTax:

ling Form 8938 is only available to those using TurboTax Deluxe or higher. To get to the 8938 section in TurboTax, refer to the following instructions:

1. Open or continue your return if you're not already in it
2. Search for 8938 and select the Jump to link at the top of the search results
3. On the Foreign Financial Assets screen, select Yes, I have foreign financial assets
4. Answer yes or no to living in a foreign country, and select Continue
5. Answer yes or no to the amount of foreign financial assets, and select Continue
6. Carefully follow the instructions. If you need Form 8938, we'll fill it out for you

See the link below for more information:

How to File

@Helen123 

[Helen123]

many thanks, perfect