turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Do I need to report Foreign stock for my FBAR reporting

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
GeoffreyG
New Member

Do I need to report Foreign stock for my FBAR reporting

With respect to your foreign stock and FBAR (FinCen Form 114) reporting requirements, these are different than those of the FATCA (IRS Form 8938) reporting requirements.

Before we discuss the differences between these two disclosure requirements, though, we wish to clarify what Form 8938 and FinCen Form 114 are, in general.  We will then address the specific matter of your foreign stock.

Under current United States law, there are certain foreign financial account reporting requirements that US taxpayers must meet annually, in addition to filing a primary tax return (Form 1040, etc.)

In fact, there are two separate disclosure forms that may be required; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax; FinCen Form 114 is not, and you may need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site through the above IRS link.

With respect to your foreign stock, determining the reporting requirements for it are dependent on the value of the stock itself, and how you "hold" it (i.e., registered to you as an individual shareholder, or held by a brokerage firm or other financial institution).

If you hold your foreign stock in an account with a US brokerage firm (or bank or institution), then you do not have a reportable foreign financial asset, according to the rules, either under FBAR or FATCA.

If you hold the stock as an asset in a brokerage account you keep overseas, in a foreign country, then it becomes a reportable financial asset (along with all other investment holdings in the account), under FBAR and FATCA.

If you own the foreign stock as a direct shareholder, and you don't have the shares "on deposit" with a US brokerage firm, then the stock does become a reportable foreign asset for purposes of IRS Form 8938 (FATCA) . . . but not for Treasury Department Form FinCen 114 (FBAR).

All of the rules are further subject to asset value tests, such that even if disclosure reporting would otherwise be required due to the nature of the asset, if the US dollar amount of the account or asset at issue (e.g. stock) falls below the filing threshold, then IRS Form 8938 and / or FinCen Form 114 would not be required.

Once again, you can confirm those facts, as well as the filing thresholds for each disclosure form, directly from the IRS.gov website above.

Do all of these foreign account disclosure rules and regulations seem unnecessarily burdensome or duplicative?  If so, it's not just your imagination.  We would tend to agree with that assessment.  However, these same rules and regulations define the present state of "foreign" account disclosure and reporting required, as a function of United States law.

We at TurboTax do not write the tax code; although we do our best to help our customers successfully navigate it.

Thank you for asking this important question.

View solution in original post

3 Replies
GeoffreyG
New Member

Do I need to report Foreign stock for my FBAR reporting

With respect to your foreign stock and FBAR (FinCen Form 114) reporting requirements, these are different than those of the FATCA (IRS Form 8938) reporting requirements.

Before we discuss the differences between these two disclosure requirements, though, we wish to clarify what Form 8938 and FinCen Form 114 are, in general.  We will then address the specific matter of your foreign stock.

Under current United States law, there are certain foreign financial account reporting requirements that US taxpayers must meet annually, in addition to filing a primary tax return (Form 1040, etc.)

In fact, there are two separate disclosure forms that may be required; each also has different reporting rules.  One is known as IRS Form 8938, and can be attached to the relevant yearly Form 1040 tax return.  The other is FinCen Form 114, which can only be filed via the internet.  The following Internal Revenue Service webpage describes them in some detail, and provides their dollar value reporting levels:

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

 

Form 8938 is included in TurboTax; FinCen Form 114 is not, and you may need to access that reporting webpage separately, if your foreign financial assets total over the limit(s).  Note that you can get to the FinCen reporting internet site through the above IRS link.

With respect to your foreign stock, determining the reporting requirements for it are dependent on the value of the stock itself, and how you "hold" it (i.e., registered to you as an individual shareholder, or held by a brokerage firm or other financial institution).

If you hold your foreign stock in an account with a US brokerage firm (or bank or institution), then you do not have a reportable foreign financial asset, according to the rules, either under FBAR or FATCA.

If you hold the stock as an asset in a brokerage account you keep overseas, in a foreign country, then it becomes a reportable financial asset (along with all other investment holdings in the account), under FBAR and FATCA.

If you own the foreign stock as a direct shareholder, and you don't have the shares "on deposit" with a US brokerage firm, then the stock does become a reportable foreign asset for purposes of IRS Form 8938 (FATCA) . . . but not for Treasury Department Form FinCen 114 (FBAR).

All of the rules are further subject to asset value tests, such that even if disclosure reporting would otherwise be required due to the nature of the asset, if the US dollar amount of the account or asset at issue (e.g. stock) falls below the filing threshold, then IRS Form 8938 and / or FinCen Form 114 would not be required.

Once again, you can confirm those facts, as well as the filing thresholds for each disclosure form, directly from the IRS.gov website above.

Do all of these foreign account disclosure rules and regulations seem unnecessarily burdensome or duplicative?  If so, it's not just your imagination.  We would tend to agree with that assessment.  However, these same rules and regulations define the present state of "foreign" account disclosure and reporting required, as a function of United States law.

We at TurboTax do not write the tax code; although we do our best to help our customers successfully navigate it.

Thank you for asking this important question.

Do I need to report Foreign stock for my FBAR reporting

Thank you, but I have a follow up: What if you own foreign shares through a foreign companies ESOP that you do not have held in your financial account? In my case the company "held" the shares on my behalf last year (2017) and now I am in the process of setting up my own personal brokerage account to receive/sell/transfer those shares. For the next tax year, I assume I will just add this new brokerage account to my FBAR, but what are my reporting obligations for 2017?

Do I need to report Foreign stock for my FBAR reporting

I think foreign ESOP, IRA, 401-k style retirement plans are not required to be reported to the FBAR form 114.

 Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service (irs.gov)

 

I also believe that such foreign retirements accounts are not reportable to the IRS form 8938. That's based on a Chat GPT search result. I couldn't find any info on the IRS site.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies