FBAR Eligibility

[ed671890]

Hi,

- I have transferred US income to a foreign bank account (more than 10,000). Do I have to complete the FBAR form? The income is not generated outside the US; it is US income. 

- I have transferred income to an account overseas for investment purposes, does that income and capital gains also need to be reported on FBAR?

Thank you

[ThomasM125]

Yes, you do need to complete an FBAR return since your foreign bank account balance exceeded $10,000 during the year. It doesn't matter where the income was generated. You don't need to report the income on the FBAR, just the maximum investment balances. You can learn more here in this IRS article.

[ed671890]

Thank you.

- So for example, for a mutual funds investment account, I can only share the amount invested and not the capital gains on it?

- I also was wondering for life insurance accounts, how is that reported? It is not accessible money, as in I will not get a payout soon. Does that have to be reported too? If so, is it the money I will receive as a payout later or the money currently in the account for 2025.

[DaveF1006]

There is a slight misunderstanding in the premise of your first question. On the FBAR, you do not just report the "amount invested" (your principal). You must report the Maximum Account Value during the calendar year.

Whether you need to report a life insurance policy depends entirely on the type of policy you have.

1. Term Life Insurance: Generally no. Since term life has no "cash value" (it’s just a payout if you pass away), it is not considered a financial account for FBAR purposes.
2. Whole/Universal/Permanent Life: Yes. If the policy has a cash surrender value, it is reportable.

If your cash surrender amount is more than $10,000, it must be reported on your return.

[ed671890]

Thank you!

Even if I do not receive a payout now for the second type of life insurance you listed, I have to report the value? Is the value the total value currently showing in the account? This account is on my name but is not being paid to me in the future.

[DaveF1006]

Yes, you do need to report the cash surrender value even if you do not receive a payout. As far as the value showing in the account, this is the cash surrender value if you were to cash out the policy.  It's not the death benefit. I just want to make this clear in case of there is any confusion.

[ed671890]

Thank you.

- I have 15 policies for a life insurance. Can they be combined under one reporting if they are the same account? 

- I have a sum assured for each policy. Does that need to be added to the surrender value? Is the surrender value enough to report?

[DaveF1006]

Yes, you may combine these under one reporting.  These do not need to be listed separately. The surrender value is enough to report.

[ed671890]

Thank you. So the annual premiums also do not have to be reported?. Only the surrender value is enough for the maximum amount in the account?

[DaveF1006]

No, the annual premiums do not need to be reported. Only the cash surrender value.

[ed671890]

Thank you

I have the assets more than 50k USD for the FATCA requirement, and more than 10k for the FBAR requirement. I am filing both, but seems like the ifnormation reported is the same? I am reporting the same accounts in both - bank, insurance accounts.