New Form 8938

[WhiteOleander]

Ok. Does anyone have a definative answer if real estate holdings must be reported on this new form? In the instructions for form 8938 pg 4, there is a list of Specified Foreign Finacial Assets. Real estate is not in this list. However, in the list as what defines an "Interest in Specified Foreign Finacial assets" it says ".... any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are or would be required to be reported, included, or otherwise reflected on your tax return."

We have quite a few clients that have houses in foreign countries. Most are worth well above the filing requirement for this form.

The penalties for not filing this form are huge. But, we don't want to file it if it is not required. Anyone have any other info?

[ChEAr$]

Ok. Does anyone have a definative answer if real estate holdings must be reported on this new form? In the instructions for form 8938 pg 4, there is a list of Specified Foreign Finacial Assets. Real estate is not in this list. However, in the list as what defines an "Interest in Specified Foreign Finacial assets" it says ".... any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset are or would be required to be reported, included, or otherwise reflected on your tax return."

We have quite a few clients that have houses in foreign countries. Most are worth well above the filing requirement for this form.

The penalties for not filing this form are huge. But, we don't want to file it if it is not required. Anyone have any other info?

What say the instructions to said new form?

[Jesse]

I don't think I'll need to deal with this form, however I did attend a seminar that touched on it. I have notes in my book: the direct ownership of Real Property outside the US, such as a vacation home, does not count towards the $50,000 asset threshold.

I can't remember if it was a change or clarification of the the laws and I don't have any cite.

[veritas]

IRS chart for reporting

http://www.irs.gov/businesses/article/0,,id=255986,00.html

So my client who has a residence in Mexico is required to file form 8938 since property is held in a Mexican corporation.

[WhiteOleander]

Thanks for posting that.

[joanmcq]

The Mexican property trusts (fidelissimo-not sure of the spelling) trigger the form because of the trust, not the property. these also require the 3520, and the little checkbox at the bottom of Sch. B.

I went to CPE on the subject provided by the IRS, and specifically asked the question regarding real estate since I have several clients that have foreign rentals or homes.