Are Form 3520 Holders 2023-2024

Welcome to our segment on FATCA and Form 8938. FATCA stands for the Foreign Account Tax Compliance Act, which became law on March 18, 2010. FATCA requires the reporting of foreign financial assets. So, what is a foreign financial asset? A foreign financial asset is basically a foreign financial account, foreign stocks or securities, interest in a foreign entity, or a financial interest in a contract with a foreign financial issuer or counterpart. So basically, insurance or an annuity with a foreign issuer. FATCA requires the reporting on Form 8938 if certain thresholds are met. So, what are these thresholds? Well, if you are a U.S. resident and you are single or married filing separately, the threshold is if your foreign financial assets are $50,000 or more at the end of the year, or if they exceeded $75,000 at any time during the year, you would be required to file Form 8938. If you are married filing jointly, those thresholds basically double to $100,000 at the year-end or $150,000 at any time during the year. To qualify as a foreign resident, those thresholds increase even more. So, if you are single or married filing separately, if the value of your foreign financial assets is $200,000 or more at the end of the year, you would be required to file Form 8938, or if they exceeded $300,000 at any time during the year, you would be required to file Form 8938. Those thresholds double for taxpayers filing married filing jointly to $400,000 at the end of the year and $600,000 at any time during the year. So, how do you qualify as being a foreign resident? Well, you have to meet either the bona fide residence test or the physical presence test. If you would like to know more about those tests...