Form 8938 - Which accounts to report

[vb6545]

Hi,

I am a US citizen/US resident.  I need to file 8938 as I meet the reporting threshold.  However, it isn't clear which foreign accounts are reportable for 8938.  

A relative (non-US person) passed away in 2022.  She had quite a few foreign bank accounts, whose balances I inherited via a process similar to a POD beneficiary abroad.  I also had a POA for those accounts.  Some of her accounts were closed in 2022 itself with a death claim, and a new foreign account was opened in my name to receive the proceeds.  Few other bank accounts still remain open, as a death claim has not yet been made, and another foreign trip would be needed to make that claim.

1. For the 8938, do I include the accounts that belong to my deceased relative, for which I am the death beneficiary/POA holder, but have not yet submitted a death claim?

2. For the 8938, I do need to report the relative's accounts that were closed via the death claim procedure in 2022 itself?

I understand that I do need to report my new foreign bank account on the 8938, as the amount in there is over the reporting threshold.  And that I will need to file a 3520 for the gift, as well as a FBAR/114 form (due to my account balance and the POA while she was still alive.)

Thank you.

[DaveF1006]

If i understand you correctly, you inherited accounts from your relative that were closed due to a death claim and then you reopened these in your name. In this context, you will report these accounts only once since these were the same accounts before and after the death claim.

Yes, since you were the heir of the accounts prior to a death claim being submitted, i would report these accounts as your accounts.  it would depend on that countries or how the countries would treat the ownership of those accounts. If you were declared the owner before the death claim, then yes, you will report these accounts on your 8938 as your accounts as well as an FBAR/FINCEN.

As far as an 3520 for the gift tax, generally inheritances are not considered gifts unless you were in receipt of the gift prior to the passing of the deceased relative. A POA does not qualify as being in receipt of the gift. Please read this IRS FAQ for further verification.  You will file an FBAR/FINCEN on the accounts you have inherited.

Lastly you mention you will file a 3520 and FBAR/FINCEN due to my account balance and the POA while she was still alive. You will not file a 3520 or an FBAR/FINCEN on accounts that you are a Power of Attorney because you do not own these accounts. You are simply a custodian not an owner for your non-resident relative, so in no case scenario would you file a 3520.  You would file a 8938 and FBAR/FINCEN once you become sole owner of those accounts.

Keep in mind also you will file a 8938 if the aggregate amount of these inherited accounts is over $50,000.  The FBAR report must be filed if the aggregate amount is over $10,000.

[vb6545]

Thank you for the information.  The accounts were not one and the same before and after the claim, and in some cases, not even at the same banks.   I had to open a new account with a new account number in my name and the proceeds were direct deposited there.  I am not considered the owner of these assets until they are transferred to me.  In fact, in many cases there was no legal way for the bank to transfer the old account to my name, as those kinds of deposits are restricted to residents and/or seniors of that country only.  Though I do have the option to wait until those deposits mature, and then make the death claim.

So, I guess I need to only declare my new account(s) on the 8938 as the value was over $50k.

As far as I know, a 3520 needs to be submitted on the assets I already inherited for 2022, since the amount was over $100k. 

And a FBAR/FINCEN needs to be submitted for the POA even though the assets were not mine (already doing that for past years as well). 

There are several tax and attorney web-sites describing the 3520 and FBAR requirements these in detail.  IRS considers inheritances a gift.  FINCEN considers POAs signature authority even if the POA has not been provided to the bank to make transactions yet.