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Level 2
April 6, 2021
Question

Any reporting when receiving international wire transfer into US?

  • April 6, 2021
  • 1 reply
  • 0 views

I am a US citizen living in US now. I was interested in buying a real estate in Turkey, so I wired $320K from my US account to my father's account in Turkey. He was going to pay this to the seller and register the real estate under my name. Then the real estate deal fell apart, so I asked my father to return my money. After all the commissions, taxes, and forex loss I received a wire transfer in my US account at the amount of $315K. All this traffic happened in 5 business days ($320K wired out and $315K received back).

Clearly this money is not a gift, so no Form 3520 is needed. I never had any account in Turkey, so it feels that there is no FATCA related filing either. IS there any reporting or filing I have to do?

    1 reply

    Level 13
    April 6, 2021

    I would recommend filing an FBAR (FinCEN 114) report on this transaction, if only as a precautionary measure.

    I would also recommend filing Form 8938 Statement of Specified Foreign Financial Assets, also as a precautionary measure.

    (Neither of these forms have any effect on your tax liabilities)

     

    While the foreign account was not yours, you clearly had a "financial interest" in the assets of that account (even if only for 5 business days) - your father was holding a significant balance of your funds on your behalf in his account. 

     

    From Report of Foreign Bank and Financial Accounts (FBAR):

     

    "A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report:

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

    The Instructions for Form 8938 have very similar language, i.e. a financial interest.

     

    "You must file Form 8938 if you are a specified person that has an interest in specified foreign financial assets and the value of those assets is more than the applicable reporting threshold."

     

    Also, "You have an interest in a specified foreign financial asset even if no income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are included or reflected on your income tax return for this tax year."

     

    "Specified foreign financial assets include the following assets -  Financial accounts maintained by a foreign financial institution".

     

    No exception is listed for assets held on your behalf in an account over which you have no direct control or authority..

    ay66026Author
    Level 2
    April 6, 2021

    Thanks, very clear. This transaction happened in Mar2021. I have to file FBAR and 8938 when I file for my 2021 taxes in 2022? Or do I have to file immediately now?

    Level 10
    April 7, 2021

    You will have to file FBAR and 8938 when you  file for your 2021 taxes in 2022