FBAR of Indian Stocks of DEMAT account

[ramkijan82]

Hello,

My wife and I have opened joint DEMAT account in India with ICICI Bank in the year 2020. ICICI Bank opened total 4 Bank accounts to link 4 securities account each.

Two are as PINS NRO & NRE and the other two are as Non-PINS NRO & NRE. So, total 4 bank accounts and 4 securities accounts.
I am holding bank account balance for the account that is linked to PINS-NRO to hold stocks (equities) where stock (equity) transactions happened. Rest three accounts are having 0 balance from the day they opened as there are no transactions at all. Now I have few questions regarding FBAR reporting on those accounts:
1. Do I need to report only the account where the non-zero balance? Or report all accounts irrespective of balances?
2. Is it mandate to report stocks (equities) value balances? If so, how to report those stocks because the values varied based on stocks performance for the year 2020.

3. Is it okay to report only financial bank balances that are associated with Stock Trading accounts?

Your valuable guidance and suggestions are much appreciated. Thanks in advance.

Ramki

[pk]

@ramkijan82 , first Namaste

second --- Neither FBAR  ( Foreign Bank Accounts )  nor FATCA ( reporting of specified  foreign assets)  really deals with the intricacies of  India's  NRE/NRO /PIN etc regime.

third,   -- even though India and US does have  data sharing  agreement in place,  FBAR reporting   for US persons  ( Citizen/Resident--Green Card / Resident for tax purposes ) is mandatory.  This is done on line  at  www.fincen.gov  and looking for form 114.  This will direct you to BSAe-filing  and allow online filling out of the account information for EACH filer.  The reporting requirement  is   to report  all financial ( generally deposit accounts  i.e.  cash holding accounts -- liquid assets )  that you own/ control or have signature authority over -- even if you are only have signature authority  like the  ones that many have  along with their parents/elderly relatives but actually do not operate,  if in the aggregate or individually  have a balance of $10,000 at the end of the year or at anytime during the year.    The filing date of this form 114 is April 15th  of each year and the penalty for willful non-filing  is very high.  My advice to all , is just to report   the accounts even if you do not quite  meet the threshold -- they get the data  from the banks anyways.  Note TurboTax does not support the filing of this form.

fourth --- FATCA is reported on form 8938.  This form is filed as part  of your return and is therefore supported by TurboTax. Here you report all foreign  financial assets  such as broker accounts.  Your  PIN accounts  would come under this category.  There is no tax consequence  for this reporting.  Immovable  investments  such as  realestate income properties are NOT  reported here.

Is there more I can do for you or have I missed something  ?

Stay safe

pk

[ramkijan82]

Thanks PK.  So, I no need to report my brokerage accounts. Only financials accounts. Is my understanding correct?

[pk]

@ramkijan82 , that is correct FBAR deals only with bank and similar liquid accounts.  IF you have brokerage account in an associated  sub account you are holding cash  ( i.e. the brokerage acts as a financial one ), it would be good idea to report that -- there is no tax impact

Brokerage accounts which shares  for you , needs to be reported  under FATCA  ( form 8938 ).along with your return

[mickeydude]

Dear @pk 

Turbo Tax says to file form 8938 only if the assets are higher than 100K USD. My NRE trading account balance is nowhere close to that, are you suggesting to file this form no matter what the balance is?

Thanks

[DaveF1006]

It depends. You need to file Form 8938 if your foreign assets are $50,000 on the last day of the tax year or $75,000 at any time during the year, if you are filing Single. If you file Married Filing Jointly, it's $100K/$150K respectively.