Tonight I happened to read an article published on the Forbes website last Thursday entitled “Reporting Cash, Gold And Safety Deposit Boxes On FBARs?” The contributing author was Robert W. Wood, a San Francisco, California-based tax lawyer. It’s an insightful read on a complicated subject, where even Wood noted:
Filing without thinking carefully about such issues can be a mistake. And many professionals debate questions like these. Should you file for precious metals and currency held in a box or custody? Is it clear when a safe deposit box is itself a financial account? Is it clear that a safe deposit box’s contents are aggregated with financial accounts to reach a higher dollar total?
Some of it depends on what is considered a financial institution, and whether safe deposit boxes with precious metals or currency are considered financial accounts. Adding to the difficulty is the fact that the particulars between the taxpayer and the institution can influence whether reporting is required. In most cases, though, filing is now required, even on gold and currency, and that can raise worrisome questions about the past.
It is hard to argue with the wisdom of going overboard when FBAR penalties are so big. If the safe deposit box can be accessed by a financial institution, the safe deposit holds precious metal certificates, or the financial institution provides insurance or other services for the contents within the safe deposit box, then the safe deposit box, and its contents, are more likely to be subject to U.S. income tax reporting and disclosure obligations…
You can read the entire piece over on the Forbes website here.
By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)
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