Help with FBAR and Form 8938. Inheritance from Japan.

[SunnyH]

Situation: I received a large inheritance from my late uncle. My late uncle is Japanese, so he is a non-US resident. A court appointed lawyer in Japan was assigned to administrate this inheritance between me and my brother, as my uncle had no children or spouse and we are the only two heirs. My brother and I live in the US. Total assets inherited for each person, my brother and I, are well over $100,000 and includes cash, land, buildings on said land, and art pieces. 

For the most part, I have the 3820 figured out. However, I am confused on whether or not I need to file an FBAR or 8938.

We both received our respective amount of cash, but I believe that there is still over $50,000 held by the estate administrator (no trust was ever formed) and there was most certainly over $75,000 in the accounts at one point, but held in Yen. These accounts are Japanese and are not in either my brother's or my name. They are accounts once held by my uncle and accounts opened by the administrator. None of these accounts are investments accounts, just checking accounts. Disbursement does require our signature on an affidavit and is requested on our behalf by the administrator; however, I am unsure if that is a requirement from the bank, and/or the administrator is covering all bases, and/or because we have authority over said accounts. Due to time differences, communication between us and the administrator is slow, so I haven't had confirmation of the last statement yet.

Do we still need to file an FBAR?

Do we have to file Form 8938?

Thanks!

This is a repost, since I accidently made the first post in the retirement thread.

[DavidD66]

It is not an either or when it comes to filing Form 8938 and FinCEN Form 114.  You have to look at the requirements for each separately.  It sounds to me like you need to file both, and there is not penalty for filing if you're not required to do so; therefore, if it were me or you were my client, I would file.  For an easy to understand side by side comparison of Form 8938 and FinCEN Form 114 requirements see the following IRS website:

Comparison of Form 8938 and FBAR requirements

[SunnyH]

Thanks for the input!

Other than these 3-forms (8938, FBAR, and 3520); are there any other forms I should be concerned with?

[DaveF1006]

Yes, there may be additional filing requirements that you may need to be aware of.  These are uncommon but might be applicable to you.

If your inheritance includes Japanese mutual funds, ETFs, or certain investment trusts, the IRS classifies these as Passive Foreign Investment Companies (PFICs).

1. You generally must file Form 8621 for each individual foreign mutual fund you own.
2. he tax treatment of PFICs is notoriously punitive. Even if you don't sell them, just holding them can trigger complex reporting.

You mentioned Form 3520, but if the inheritance is coming through a Japanese trust (like a shintaku) where you are considered an "owner" or if the trust has a U.S. person as a beneficiary, Form 3520-A might be required. 

This is the annual information return for the trust itself. If the Japanese trustee won’t file it (which they often won't), you may have to file a "Substitute Form 3520-A" yourself to avoid massive penalties.

If you inherited shares in a Japanese family business or a partnership:

1. Form 5471: Required if you own 10% or more of a foreign corporation.
2. Form 8865: Required if you inherited an interest in a foreign partnership