Form 8938 and real estate

Jun 28, 2022 Last reply: 4 years ago 1 Replies
F

I have read in many places words similar to: "foreign real estate held by an individual is not reportable on Form 8938"



However, based upon what I read (in just one place), I believe that should read: "fully paid for foreign real estate held by an individual is not reportable on Form 8938"



That one source said in effect: If you have a bank mortgage, developer financing, or have just paid a deposit on a buliding to be built, it has to be reported.



Is this one source correct? Does it matter if the real estate is not fully paid for?


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I

Form 8938 is for reporting foreign *financial* assets. Real estate is not reportable. If you own real estate subject to a mortgage, it still isn't reportable. A mortgage which you have to repay is not a financial asset for you. If you lend money, the mortgage is a financial asset. Note that some countries require that you own real estate through an entity. Ownership of the entity might be a financial asset, since the real estate isn't owned directly by the individual.

Ira Smilovitz, EA Leonia, NJ

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