Back on May 23, I recapped my ongoing investigation into potential U.S. government reporting requirements for offshore safe deposit boxes.
At the conclusion of that post, I blogged:
The next time I take up this topic, I plan on picking apart FBAR and Form 8938.
That’s what I’ll be doing today.
To carry this out, I’m going to use the “Comparison of Form 8938 and FBAR Requirements” table (last updated February 10, 2014), which is located here on the Internal Revenue Service website.
Note the following from that comparison:
Under “Types of Foreign Assets and Whether They are Reportable,”
• “Foreign currency held directly”– “No” for both Form 8938 and FBAR
• “Precious Metals held directly”– “No” for both Form 8938 and FBAR
• “Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles”– “No” for both Form 8938 and FBAR
Okay. So from what I take away from the above, foreign currency, precious metals, and the personal property specified which are “held directly” are not required to be reported on FBAR and Form 8938.
But what constitutes “held directly”? Consider the following from the “Basic Questions and Answers on Form 8938” web page (last updated January 10, 2014) on the IRS website:
Q4. I directly hold foreign currency (that is, the currency isn’t in a financial account). Do I need to report this on Form 8938?
Foreign currency is not a specified foreign financial asset and is not reportable on Form 8938.
I understand “held directly” as meaning not in a financial account.
But does the IRS consider an offshore safe deposit box- either bank or private- a “financial account?”
Also from that Form 8938 Q&A web page:
Q22. I have a safe deposit box at a foreign financial institution. Is the safe deposit box itself considered to a financial account?
No, a safe deposit box is not a financial account.
“No, a safe deposit box is not a financial account.”
More next time…
By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)
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