FBAR reporting - Questions on options, vested/ unvested and exercising threshold

[JustAnotherTTUser]

Hi

Questions on what would be included to meet the $10000 threshold for FBAR reporting?

1. Would estimated worth of unvested options be included?

2. Would estimated worth of vested but unexercised options be included?

Thanks.

[MinhT1 · Accepted solution]

Options when not yet exercised are generally not considered as property and are not reportable on FBARs or form 8938.

[postbox_shashank]

One question on FBAR - As per turbotax forms, i have understood that the FBAR covers only foreign bank accounts. It does NOT cover foreign stocks and brokerage account. If my brokerage and stocks are more than USD 100,000.00 then i need to file FATCA in place of FBAR. Is this correct? If not, then why FBAR report is having an option of securities along with Bank. Gurus, please help. 

[CatinaT1]

I think these links from the IRS will help answer your questions.

Comparison of Form 8938 and FBAR requirements

Summary of FATCA Reporting for U.S. Taxpayers

[post989362]

FATCA vs FBAR

Hi Catina,

I have read the below documentation and given below are the findings:

1. Foreign stock needs to be filed only in FATCA (Form 8938)

2. FATCA (Form 8938) is required when the total value of foreign stock is exceeding USD 100,000.00 (USD One hundred thousand only).

3. If we decide to file FATCA (Form 8938) then FBAR is not required. 

4. If FATCA (Form 8938) is filed then i need to include cash balances for the year (similar to FBAR). 

Please confirm the above understanding. 

FBAR vs FATCA

[post989362]

One more question here - If foreign stocks are not relevant to FATCA then why FBAR form is having a drop down of "Securities" along with Banks? This is confusing the tax filers. 

[DMarkM1]

1. 1. Foreign stock needs to be filed only in FATCA (Form 8938)  No.  Foreign stock held outside of a financial account is reported on the 8938 only.  If stocks are in a foreign brokerage acct for example the reporting is on 8938 and FBAR if the respective reporting thresholds are exceeded.

2. FATCA (Form 8938) is required when the total value of foreign stock is exceeding USD 100,000.00 (USD One hundred thousand only). It depends.  If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. Married taxpayers filing separate income tax returns. If you are married and file a separate income tax return from your spouse, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.

3. If we decide to file FATCA (Form 8938) then FBAR is not required. No.  Filing a form 8938 does relieve the requirement to also file FBAR. 

4. If FATCA (Form 8938) is filed then i need to include cash balances for the year (similar to FBAR). Yes.  Highest value of the account/asset during the year is reported.

5.  If foreign stocks are not relevant to FATCA then why FBAR form is having a drop down of "Securities" along with Banks? This is confusing the tax filers.  Stocks held in a foreign account are reported in FBAR.  Only foreign stocks not in a financial account are not included in FBAR.