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Maztex

Dec 6, 2011, 9:31 PM

Post #1 of 9 (3226 views)

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IRS Form 8938

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I'm surprised there has been no discussion about the IRS requiring the filing of this form, beginning in 2012. A US single filer living abroad who must otherwise file a US tax return must file the form with his/her tax return if he/she holds certain foreign assets in excess of $200,000. That's a very rough summary, by the way -- please read the Form for details. Here's a link to an article that restates much of the new Form's requirements, and provides a link at the end to a set of draft IRS instructions:

http://mazmessenger.com/...gn-financial-assets/

The way I read the instructions, and I am certainly no expert, if you own your Mexican home through a fideicomiso you will have to file this Form if your home is valued in excess of $200,000 at the end of the taxable year ($400,000 if you file jointly). You'd think there would be an exception if your Mexican home is your primary residence, but I do not see that here.

Anyone know anything about this?

thanks,

MazTex

La Isla


Dec 6, 2011, 10:33 PM

Post #2 of 9 (3212 views)

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Re: [Maztex] IRS Form 8938

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I'm surprised there has been no discussion about the IRS requiring the filing of this form, beginning in 2012. A US single filer living abroad who must otherwise file a US tax return must file the form with his/her tax return if he/she holds certain foreign assets in excess of $200,000.
thanks,

MazTex

Not meaning to make light of your concern about this new regulation, but not all of us here at Mexconnect hold foreign assets in excess of $200,000. This could explain the fact that you are the first member to bring this to our attention.

DavidHF

Dec 7, 2011, 6:16 AM

Post #3 of 9 (3178 views)

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Re: [Maztex] IRS Form 8938

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I went to the IRS website and read about Form 8938, there is no mention of real estate as an asset, only bank accounts and investments.

stevebrtx

Dec 7, 2011, 6:51 AM

Post #4 of 9 (3168 views)

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Re: [DavidHF] IRS Form 8938

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I did a lot of reading yesterday until my lips went numb and my blood pressure hit 300 and I tend to agree that's it's bank accounts they're after. It's part of the "thank you parting shot of Dodd-Franks FATCA bill". There is a push on the American Citizens Abroad web site to repeal the bill, but also some shilling stories including some on FBAR that will chill you to the bone. People who owed no tax, didn't know they were supposed to report FBAR and were fined huge amounts.

It looks like foreign banks have to start reporting Jan 1 2014, so tax year 2013 will be the decision time.
http://www.chapalaweather.net

Maztex

Dec 7, 2011, 6:56 AM

Post #5 of 9 (3166 views)

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Re: [DavidHF] IRS Form 8938

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What about the top of page 4 of the instructions, David, where a foreign financial asset is defined to include the following, if held for investment: "an interest in a foreign trust or estate" ? Fideicomisos are foreign trusts, and of course a home is an investment.

To the earlier poster: tens of thousands of Americans own homes along the Mexican coasts (where fideicomisos are used to hold property), and could be subject to this reporting requirement.

thanks,
MazTex

morgaine7


Dec 7, 2011, 7:25 AM

Post #6 of 9 (3159 views)

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Re: [Maztex] IRS Form 8938

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As usual, it takes less time to just file the form than it does to try to figure out whether I really have to file it. I own my home with a fideicomiso and have already been reporting it on the FBAR and on Forms 3520/3520A, so it looks like all I'd have to do is fill in my personal data and Part IV on the last page of the form (see p. 5 of instructions, bottom right, "Duplicative Reporting"). But it's irrelevant because the total value of my home and Mexican bank account is nowhere near $200,000.

Kate

La Isla


Dec 7, 2011, 8:27 AM

Post #7 of 9 (3134 views)

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Re: [Maztex] IRS Form 8938

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To the earlier poster: tens of thousands of Americans own homes along the Mexican coasts (where fideicomisos are used to hold property), and could be subject to this reporting requirement.

thanks,
MazTex

Since I don't live along any of the Mexican coasts, I was not aware of this. The Americans I know would be happy to own an apartment in the city : -) !

donemry

Dec 7, 2011, 1:17 PM

Post #8 of 9 (3107 views)

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Re: [Maztex] IRS Form 8938

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What about the top of page 4 of the instructions, David, where a foreign financial asset is defined to include the following, if held for investment: "an interest in a foreign trust or estate" ? Fideicomisos are foreign trusts, and of course a home is an investment.

To the earlier poster: tens of thousands of Americans own homes along the Mexican coasts (where fideicomisos are used to hold property), and could be subject to this reporting requirement.

thanks,
MazTex

You should not rely on common definitions for terms in tax law. The terms "trust" and "investment" have very specific definitions for tax purposes.

DavidHF

Dec 9, 2011, 3:45 PM

Post #9 of 9 (3020 views)

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Re: [Maztex] IRS Form 8938

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My take is that owning a home held in Fideicosimo is not an "investment" it's real property.
 
 
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