One thought on “Related Reading: Robert W. Wood’s ‘Reporting Cash, Gold And Safety Deposit Boxes On FBARs?’

  1. Tedl Bauman

    My thinking on this has evolved, but Im not a lawyer, so don’t try to use this as a formal opinion if trouble arises.

    I base my reading on the IRS Internal Revenue Manual section 4.26.16.3.2.3. It plainly says that that safe deposit boxes are not financial accounts, with one important exception. In the note to that section, the IRM says:

    A reportable account may exist where the financial institution providing the safety deposit box has access to the contents and can dispose of the contents upon instruction from, or prearrangement with, the person.

    This means that that both gold bullion stored in foreign vaults and foreign bank safe deposit boxes are not reportable if only you, or someone with power of attorney for you, can open the box. If the vault company or bank can open the box on its own, or provides insurance for the contents as part of the rental agreement, then there is a “bailee” relationship between you and the vault/bank. In those cases, even if the stored content is otherwise non-reportable bullion, the legal nature of the relationship is based on the financial value of the contents, and therefore triggers reporting.

    Hope that helps.

    Reply

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