What businesses must file Form 8938, Statement of Specified Foreign Financial Assets?

A specified domestic entity is:

• A closely held corporation or partnership with significant passive income or significant passive income sources, or
• A domestic trust with a specified domestic entity or specified individual as a beneficiary

Domestic entity generally means created in or under the laws of the US.

Closely held means that a specified individual owns more than 80% of the corporation’s stock or the partnership’s capital. A specified individual is a US citizen, resident alien, or certain nonresident alien.

Significant passive income means at least 50% of specified foreign asset gross income is passive income, like dividends, interest, most royalties and rent, and certain gains.

Significant passive income sources means at least 50% of the specified foreign assets produce passive income. For more info on this percentage, see page 3 of Percentage of passive assets held by a corporation or partnership. 

• An account with a foreign financial institution, but not its US branch
• Stock or securities, if not issued by a US person
• Any interest in a foreign entity, and 
• Any financial instrument or contract from a non-US party

Income and asset values in foreign funds must be converted to US dollars when used for this form.

These terms and others are covered in greater detail in the Instructions for Form 8938:

• Financial Account
• Foreign financial institution
• Other Specified Foreign Financial Assets 
• Assets Not Required To Be Reported 

A specified domestic entity files Form 8938 when its total specified foreign financial asset value is:

• More than $50,000 on the last day of the tax year, or 
• More than $75,000 at any time during the year

Form 8938 is filed with the entity’s annual tax return by the filing due date (including extensions) for that return.