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Foreign Financial Assets

I have several clients who are retirees from the Inter-American Development Bank in Washington, DC. Just this year, they were informed that their pensions were deemed to be qualified as "foreign financial assets" and must be reported on Form 8938. They will need to include this form on their 2015 tax returns and file amended returns, as needed, back to 2011.

If anyone is familiar with this form? I have some questions and the IRS instructions are as vague and murky as usual. I presume the gross pension amount from Line 1 of the 1099-R is on Line 1d of Part III of the the 8938? And explanatory information is in Part V? Part VI?

Some individuals also have foreign bank accounts - below the $10,000 threshold that would have triggered the FBAR requirement but, when include with the gross pension income, sufficient to report on the 8938. This appears to be reported in Part I, with explanatory information in Part V?

Thank you for pointing me in the right direction.

Reply to
Michael Bratt
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For pension only, you will use Part II Lines 1 -3, Part III Line 2d and Part VI all lines except 3 and 7. Skip 6 if you answer No to Line 5.

The value is the amount of the gross distribution. So Line 2 Part II has the same value as Part III Line 2d and you use a check in the appropriate box in Part VI line 4 using the value in Part III.

If there is also foreign bank accounts, they get reported in Part I, the appropriate lines in Part III Line 1 and Part V.

Reply to
Alan

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