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posted May 18, 2021 12:41:53 AM

Foreign financial assets or accounts ?

Hello,

 

1) I have the following financial instruments in a foreign country: Pension Plan, Deferred Saving plan, Continuing education fund, managers' insurance. Should these be reported as financial accounts or financial assets ? Or both ?

 

2) Where do I report about the profits that these instruments made this year ? in the page "Amounts Related to Foreign Financial Assets" ? For each instrument, I have info about how how much money it made and how much money was deducted due to management fees. I don't know how to fit these values into the fields in "Amounts Attributable to Other Foreign Financial Assets", if this is the place to add these values.

 

3) When I was asked if I have additional foreign assets I entered "Yes" and filled in my Pension plan details. When I wrap up my report I am asked to fill in form 8938 part VI Line 3(d) - Check if no tax item reported in Part III with respect to this asset. I don't understand what this check-box means.

 

Thanks 🙂

 

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1 Replies
Expert Alumni
May 18, 2021 6:28:03 PM

I found this IRS link has many answers including the questions you have asked. 

  1. Financial accounts are Savings, deposit, checking, and brokerage accounts held with a bank or broker-dealer. Financial Assets are those that are not held in an account. Please refer to the IRS site for more information that is under the heading of What are the specified Foreign Assets I need to report on Form 8938.
  2. The check box in part VI Line 3(d) refers to if you reported any taxable distribution on your 2020 Tax Return. if not, leave the box blank.
  3. in regards to the profits made, this section you will report the income distributions you made and where you reported these on your 2020 tax return. So here, you will enter the amounts on the first column, then the form and line where reported, and the schedule and line where reported. For this, you will need to look at your tax return to get this information. This IRS instruction for the 8938 is helpful also.