1099-OID, Foreign Accounts: money between personal accounts

[21mat5]

Hey,

Do I need to submit 1099-OID if I transferred $105,000 from my US bank account to my own foreign bank account (to purchase an apartment there)? If so, where exactly do I specify on TurboTax forms that the money was there because I sent it to myself?

[KarenJ2]

You do not need to report on  your tax return a money transfer from the US to overseas.

However, you will have at least one reporting requirement for your foreign bank account.

You will need to reply to the question in TurboTax  regarding foreign financial accounts.  You may need to file the FinCEN 114 (FBAR) and the Form 8938,

Who must file an FBAR

United States persons are required to file an FBAR if: 

1. the United States person 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. 

United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States. 

FBAR filing link

Comparison of Form 8938 and FBAR

Form 8938 can be filed with your TurboTax return if it applies to you.

[21mat5]

I am a bit confused. You tell me I do not have to report it but then mentions that I need to submit form 8938 (I'm single and live in the US) and FBAR.

So I need to report it? How do I fill out in form 8939 the $105,000 I sent to my own bank account overseas (Europe)? As I am asked to write down in which form/schedule I reported that amount.

[KarenJ2]

I apologize for the confusion.  I meant that the money you transferred is not taxable on your tax return.

Please note that you will need to report the balance of any foreign financial accounts you own for 2019 on the FBAR filing link if one of your foreign bank accounts had a balance of $105,000 on any one day in 2019..

If you have foreign bank accounts,  foreign pension accounts, foreign stocks, foreign mutual funds, etc (please see complete list on Form 8938 instructions) and the value of your total assets listed are more than a certain amount, then you must file Form 8938.  Please see the amounts below:

Specified individuals living in the US:

• Unmarried individual (or married filing separately): Total value of assets was more than $50,000 on the last day of the tax year, or more than $75,000 at any time during the year.

• Married individual filing jointly: Total value of assets was more than $100,000 on the last day of the tax year, or more than $150,000 at any time during the year.

Specified individuals living outside the US:

• Unmarried individual (or married filing separately): Total value of assets was more than $200,000 on the last day of the tax year, or more than $300,000 at any time during the year.

• Married individual filing jointly: Total value of assets was more than $400,000 on the last day of the tax year, or more than $600,000 at any time during the year.

If your foreign assets qualify for reporting on Form 8938, then the form will ask you for example if you have a foreign bank account, what line number on your tax returns reflects the bank interest you earned (if any).  If you have foreign stocks, what line on your tax return reflects the dividends earned on the foreign stock (if any).

Compariaon of Form 8938 and FBAR Requirments

[21mat5]

Thank you for your help. How do I explain the $105,000 in my foreign bank account in the report? As this money was money earned and taxed in the USA and then transferred to the foreign bank, what line on my tax return reflects that?

[KarenJ2]

You are referring to Form 8938. you do not need to file this form unless you have specified foreign financial assets over a certain threshold.   See the threshold for single living in the US below.  I don't think you need to file this form.  You do not need to complete the part about the schedule and line unless your assets are more than the following.

Unmarried taxpayers. If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. 

You do not need to explain the $105,000 in your foreign account. 

The FBAR is only to report your foreign bank account.  You must keep records for each account that you report on an FBAR.

• Name on the account, 
• Account number,
• Name and address of the foreign bank, 
• Type of account, and 
• Maximum value during the year. 

Comparison of Form 8938 and FBAR Requirements.

[21mat5]

Thank you so much!

So on Form 8938, they are specifically asking about money earned overseas? So even though I had $105,000 in a foreign bank account, because it was sent from a US bank, I do not need to submit Form 8938?

And if I understand you correctly, even if I do not need to submit Form 8939, I still need to submit FBAR? (because regardless of the source of money, I had a foreign bank account with over $10,000)

[KarenJ2]

Form 8938 is just asking about foreign assets.  It doesn't matter whether money was transferred from the US.  You do not need to submit Form 8938 unless you had specified foreign financial assets more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. (If you are single and live in the US).  See Form 8938 Instructions for more information.

Yes, if you had a foreign bank account in 2019 and the balance on any one day was more than $10,000, you need to report your foreign bank.  You have to report all your foreign bank accounts even if the others did not have more than $10,000 in 2019.

Please see this link to file your FBAR by April 15, 2020.  Individuals Filing the Report of Foreign Bank and Financial Accounts

[21mat5]

The money was transferred to my foreign bank account which is considered as a foreign financial asset (according to the link you provided to the IRS website) thus it appears I do need to submit Form 8938. 

"you must file Form 8938 if you are a specified person (live here so applies to me) that has an interest in specified foreign financial assets (I have a foreign bank account so applies to me) and the value of those assets is more than the applicable reporting threshold (I had more than $75,000 at any time during the tax year so also applies to me)."

[KarenJ2]

Yes, you are correct.  You need to file both.  You previously asked what to put for schedule and line number.  If you earned any foreign interest from your foreign bank account, then you need to report it as if you received a Form 1099-Int.  This will be found on Schedule B, line 1.  If you did not earn any interest from your foreign bank account, then leave that part blank.

If you did not report any tax item for a specified foreign financial asset on any form or schedule for the tax year, check the box on line 3d of Part V or Part VI for the account or asset.  

Form 8938

[21mat5]

OK, thank you. It makes more sense.

So since I also have interest from that bank, I will put down Schedule B, line 1. And it seems as if there is no way for me to explain the $105,000 in that bank, correct?

I did end up getting a tax return (overpaid my property tax in that foreign country) to the foreign bank account. I know I can write it in Form 8938, Part III, 1g. Is there any line or schedule I can match with that?

[KarenJ2 · Accepted solution]

You will need to enter your interest income from your foreign bank account as if you had received a 1099-INT form.  TurboTax will transfer it to line 1 of Schedule B.

You should not enter a foreign property tax refund on your tax return or foreign reporting forms.  It does not apply.

You do not need to explain the amount in your foreign bank account.