I'm purchasing the allowed limited quantity of foreign stocks of the company I work for and they match the same quantity at the year end. How to report them with my tax filing?
I have not plan to sell them at the moment and the stock does not generate dividend or yield...
The brokerage firm is UK based and they do not provide any US tax documents.
Similar question, do I need to report them on the 8938 and on the FenCin? If yes, under which category?
@Phoenix3 , assuming that you are US citizen/Resident/Resident for tax purposes, ownership of foreign stock is not a taxable event ( it just like if you bought stocks in the USA ) -- there is nothing to report.
(a) You will have to report any earnings either as dividend or from the sale of the stocks ( when and if ) --- you will need to retain the cost of the stocks when you buy these because you will need that to compute the gain ( Capital gain or short-term gain )
(b) Depending on the total amount of monies invested, there may be a requirement to report this on FATCA ( Financial Asset ) form 8938 ( with your return ), but the threshold for that depends on your filing status , where your tax home is and ranges from around $90,000 to more than $140,000 ( I think )
Does this cover your query ?
@Phoenix3 , assuming that you are US citizen/Resident/Resident for tax purposes, ownership of foreign stock is not a taxable event ( it just like if you bought stocks in the USA ) -- there is nothing to report.
(a) You will have to report any earnings either as dividend or from the sale of the stocks ( when and if ) --- you will need to retain the cost of the stocks when you buy these because you will need that to compute the gain ( Capital gain or short-term gain )
(b) Depending on the total amount of monies invested, there may be a requirement to report this on FATCA ( Financial Asset ) form 8938 ( with your return ), but the threshold for that depends on your filing status , where your tax home is and ranges from around $90,000 to more than $140,000 ( I think )
The matching part tax handling depends on if these are are available to you right away ( vested ) and the limitations that is put on these for disposal etc. Need to tell me more as you may have to report the value of these .
Does this cover your query ?
Thanks for your reply. Let us consider the matching are immediately vested. Do I need to pay tax on them?
How to report the foreign stocks on the 8938? Similar to a deposit account?
(a) matching vested stocks can be viewed as stocks with ZERO basis and thus no reporting required ( treating these like 403(a/b) tax advantaged savings targeted for retirement OR more commonly looked as income , like "other " income -- taxed at FMV but not FICA taxed ( because employer does not match the 50% FICA contribution and because this is not guaranteed as part of wages.
(b) Yes you report it like a deposit account using FMV on the last day of the year or the highest in the year
BTW --- are you working in the UK or are you stationed here in the USA ?