Foreign financial assets

[terrence-fairfie]

Hello,

I am filling out my taxes and had a question about the foreign financial assets question. I have a small amount of stock in what I believe is a Canadian energy company. Everything I own is publicly traded, and held on Etrade. I believe it says that stock does NOT count as a foreign financial asset if held by a financial institution. Is Etrade such a financial institution? Or more generally, given the above facts, do I hold foreign financial assets?

Thank you,
Terry

[GeoffreyG · Accepted solution]

This answer will confirm what you already seem to have (correctly) researched yourself.

If your shares in a "foreign" (which definition includes Canada) company are held through a brokerage firm or other financial institution licensed and registered in the United States (like E-Trade), then the following is true.

Despite the fact that the shares of your company may be listed on a foreign stock exchange as their primary trading venue, your "foreign" shares of stock would not constitute "foreign assets" for reporting purposes of the IRS or the US Treasury Department, as long as they are held in a US-based account.  Thus, neither of the two main disclosure and reporting documents, IRS Form 8938 or US Treasury Dept. FinCen Form 114, would be required in this case, or that need to be filed by you.

Hence, you would otherwise answer "no" to the TurboTax question asking if you have foreign financial assets to declare.

Thank you for asking this important question.