Form 8938/capital gains

[JorisKroeze]

Hello,

I need to report form 8938 because I hold a couple foreign brokerage accounts. These accounts should be getting more worth every year. Lets say in the beginning 2019 they were worth $100000 and in the end of 2019 $150000. This is not considered capital gain right? (because I don't sell or buy, I just hold these acoount)  So what do I have to report? Only the maximum value and the little dividend that has been paid by these accounts? 

Thanks

[KathrynG3]

It depends. Depending on the amounts in the foreign accounts, you may have additional filing requirements.

Click the links to learn more:

Should I file FBAR (FinCEN 114), Form 8938, Form 3520 or all of these?

2019 IRS Comparison of Form 8938 and FBAR Requirements

2019 Report of Foreign Bank and Financial Accounts (FBAR). IRS Resources assistance: For assistance with completing the FBAR, call 866-270-0733 (for callers within the U.S.) or 313-234-6146 (for callers outside the U.S.). Questions regarding the FBAR can be sent to FBARquestions@irs.gov.

2019 Form 8938 filing requirements

2019 FATCA Reporting, Form 3520

[JorisKroeze]

yes. I understand I also need to do the FBAR. I meet all the requirements for the amounts for form 8938 and FBAR. I already looked at all these links you send me but I am still confused if the growth of the accounts is considered capital gains?

Thanks

[KathrynG3]

Not necessarily. It would have to be an investment account to be considered capital gains. An example of a foreign account where growth could be considered as investment activity would be for a foreign account holding cryptocurrency. When the units are traded, then a taxable even would have occurred. However, careful recordkeeping is needed so that deposits are not considered gains.

Otherwise, it would not, as a rule, be considered capital gains to have an account increase in value. 

IRS: FAQs on Virtual Currency Transactions

IRS: Cryptocurrency Wallets

IRS: Virtual Currencies

Mining Bitcoin Taxation

[JorisKroeze]

These are investments accounts (securities accounts) which holds stocks. These are not sold only hold on to them. So they only increase in value. So I guess it's not considered capital gain then?

[DavidD66]

You would only have capital gains (or losses) to report if you had sales transactions.  When the value goes up (or down) and you don't sell you have unrealized gains/losses.  You don't need to report unrealized gains/losses. 

[JorisKroeze]

Okay thank you! So my final question will be: So I don't have to report the growth of these brokerage accounts? Since it's not interest, dividends, royalties, other income, gains, deductions or credits?

Thanks

[JohnB5677 · Accepted solution]

You stated that correctly.  There are two different things going on.  First you are reporting your accounts on Form 8938.  Second is if there are transactions like you mentioned above you will only then have to report them as income.

[MUSTANGSally89]

What about foreign pension account? There are no deposits but it's growing in value... If I did not make any withdrawals from it the growth is not considered gains/interest that I need to report as foreign income, correct? Obviously will file FBar. I am trying tk understand if on form 8938 I will have income to report. Thanks!

[Vanessa A]

The increase in value of your foreign pension account that is not yet distributed is not taxable.