Instructions For Form 8938 - 2016 (Page 7 of 14) in pdf

financial account that holds specified

the part of the year that you are a

specified foreign financial asset for the

foreign financial assets, you do not have

specified individual.

purpose of determining the total value of

to report the assets held in the account.

your specified foreign financial assets to

Example 1. John is a calendar year

see whether you have met the reporting

taxpayer. The Form 8938 reporting

Interests in assets generating cer

threshold. Use this rate even if you sold

period begins on January 1 and ends on

tain unearned income of children. If

or otherwise disposed of the specified

December 31.

you file Form 8814, Parents' Election To

foreign financial asset before the last

Report Child's Interest and Dividends,

Example 2. Agnes was a single,

day of the tax year.

with your income tax return to elect to

calendar year taxpayer who died on

include in your gross income certain

Exception for financial account

March 6. The Form 8938 reporting

unearned income of your child (the

statement currency conversion rate.

period begins on January 1 and ends on

“kiddie tax” election), you have an

You may rely on the foreign currency

March 6.

interest in any specified foreign financial

conversion rate reflected in a financial

Example 3. George, a calendar year

asset held by the child.

account statement issued at least

taxpayer, is not a U.S. citizen or

annually by the financial institution

Interests in assets held by entities

married. George arrived in the United

maintaining the account.

that are not disregarded entities. In

States on February 1 and satisfied the

most cases, you do not own an interest

Reporting the value of jointly owned

substantial presence test for the tax

in any specified foreign financial asset

assets. If you own an asset jointly with

year. The Form 8938 reporting period

held by a partnership, corporation, trust,

one or more persons, you must report

begins on George's U.S. residency

or estate solely as a result of your status

the asset's maximum value as follows.

starting date, February 1, and ends on

as a partner, shareholder, or

December 31.

Married specified individuals

beneficiary.

filing a joint income tax return. If you

Interests in assets held by grantor

Reporting Maximum Value

are married and you and your spouse

trust. If you are considered the owner

file a joint income tax return, report any

You must report the maximum value

under the grantor trust rules of any part

specified foreign financial asset that you

during the tax year of each specified

of a trust, you have an interest in any

jointly own only once and include the

foreign financial asset reported on Form

specified foreign financial asset held by

maximum value of the entire asset (and

8938. In most cases, the value of a

that part of the trust you are considered

not just the maximum value of your

specified foreign financial asset is its fair

to own. For exceptions from reporting

interest in the asset). Also, you must

market value. An appraisal by a third

for owners of certain domestic

report any specified foreign financial

party is not necessary to estimate the

investment or bankruptcy trusts, see

asset that you or your spouse

maximum fair market value during the

Domestic investment trusts

and

separately own and include the

year. See

Valuing financial

accounts,

Domestic bankruptcy trusts

maximum value of the entire asset. If

and

Valuing other specified foreign

Exceptions to Reporting, later.

you and your spouse file a joint income

financial

assets, later.

tax return that includes Form 8814, you

Interests in foreign estates and for

Assets with no positive value. If the

must report any specified foreign

eign trusts. An interest in a foreign

maximum value of a specified foreign

financial asset your child owns only

trust or a foreign estate is not a

financial asset is less than zero, use a

once and include the maximum value of

specified foreign financial asset unless

value of zero as the maximum value of

the entire asset.

you know or have reason to know based

the asset.

on readily accessible information of the

Married specified individuals

interest. If you receive a distribution

Foreign currency conversion. If your

filing separate income tax returns. If

from the foreign trust or foreign estate,

specified foreign financial asset is

you are married and you and your

you are considered to know of the

denominated in a foreign currency

spouse are specified individuals who file

interest.

during the tax year, the maximum value

separate income tax returns, both you

of the asset must be determined in the

and your spouse report any specified

Interests in foreign pension plans

foreign currency and then converted to

foreign financial asset that you jointly

and foreign deferred compensation

U.S. dollars.

own on your separate Forms 8938, and

plans. Report in Part VI your interest in

both you and your spouse must include

In most cases, you must use the U.S.

the foreign pension plan or foreign

the maximum value of the entire asset

Treasury Bureau of the Fiscal Service

deferred compensation plan. Do not

on your separate Forms 8938. You also

foreign currency exchange rate for

separately report the assets held by the

must report any specified foreign

purchasing U.S. dollars. You can find

plan. See

Valuing interests in foreign

financial asset that you own individually

this rate on

estates, foreign pension plans, and

on your separate Form 8938 and

fsreports/rpt/treasRptRateExch/

deferred compensation

plans, in

include the maximum value of the entire

treasRptRateExch_home.htm. If no U.S.

Reporting Maximum Value, later.

asset. If you file Form 8814, you must

Treasury Bureau of the Fiscal Service

report any specified foreign financial

exchange rate is available, you must

Reporting Period

asset your child owns and include the

use another publicly available foreign

Unless an exception applies, the

maximum value of the entire asset.

currency exchange rate for purchasing

reporting period for Form 8938 is your

U.S. dollars and disclose the rate on

Other joint ownership. If you are a

tax year.

Form 8938.

joint owner of a specified foreign

Exception for partial tax years of

financial asset and you cannot use one

Currency determination date. Use

specified individuals. If you are a

of the special rules for married

the currency exchange rate on the last

specified individual for less than the

individuals who file a joint tax return, you

day of the tax year to figure the

entire tax year, the reporting period is

must report the specified foreign

maximum value of a specified foreign

financial asset or the value of a

Instructions for Form 8938 (2016)

Instructions For Form 8938 - 2016 Page 7

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