Form 8938

[Burke]

Question arose concerning whether a US citizen has to report value of real estate (non income-producing) held in another country. It looks like 8938 is just for monies in financial institutions. So there is no requirement for reporting property ownership unless it is sold and converted to cash?

[mooretax]

the factor is the interest in the asset

See page 4, third column of 2014 form 8938 instruction

http://www.irs.gov/pub/irs-pdf/i8938.pdf

Interests in Specified Foreign Financial Assets
You have an interest in a specified foreign financial asset if 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 income tax return.

You have an interest in a specified foreign financial asset even if there are no income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the asset included or reflected on your income tax return for this tax year.

[Burke]

Yes, I saw that. It addresses "specified foreign assets." But note in the 1st and 2nd columns, where "specified foreign asset" is described, nowhere does it mention real estate not held as an investment, or used in a trade or business. In fact it doesn't mention real estate at all.

[TAXNJ]

Does this help - SOURCE. IRS WEB-SITE

Yes, I saw that. It addresses "specified foreign assets." But note in the 1st and 2nd columns, where "specified foreign asset" is described, nowhere does it mention real estate not held as an investment, or used in a trade or business. In fact it doesn't mention real estate at all.

Types of Foreign Assets and Whether They are Reportable on Form 8938

Financial (deposit and custodial) accounts held at foreign financial institutions
Yes
Financial account held at a foreign branch of a U.S. financial institution
No
Financial account held at a U.S. branch of a foreign financial institution
No
Foreign financial account or asset for which you have signature authority
No, unless any income, gains, losses, deductions, credits, gross proceeds, or distributions from holding or disposing of the account or asset are or would be required to be reported, included, or otherwise reflected on your income tax return
Foreign stock or securities held in a financial account at a foreign financial institution
The account itself is subject to reporting, but the contents of the account do not have to be separately reported
Foreign stock or securities not held in a financial account
Yes
Foreign partnership interests
Yes
Indirect interests in foreign financial assets through an entity
No
Foreign mutual funds
Yes
Domestic mutual fund investing in foreign stocks and securities
No
Foreign accounts and foreign non-account investment assets held by foreign or domestic grantor trust for which you are the grantor
Yes, as to both foreign accounts and foreign non-account investment assets
Foreign-issued life insurance or annuity contract with a cash-value
Yes
Foreign hedge funds and foreign private equity funds
Yes
Foreign real estate held directly
No
Foreign real estate held through a foreign entity
No, but the foreign entity itself is a specified foreign financial asset and its maximum value includes the value of the real estate
Foreign currency held directly
No
Precious Metals held directly
No
Personal property, held directly, such as art, antiques, jewelry, cars and other collectibles
No
‘Social Security’- type program benefits provided by a foreign government
No

[Burke]

Yes, yes it does. Thank you very much. Now my client who is disgusted with the US can move to Chile and buy a house and not have to report it to the "gummit."
Because, after all, we are going to have a revolution here and the USG is going to take back all our assets.......

[Gretel]

Types of Foreign Assets and Whether They are Reportable on Form 8938

Foreign real estate held directly
No

Now I am confused since this seems to contradict this definition:
Interests in Specified Foreign Financial Assets
You have an interest in a specified foreign financial asset if 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 income tax return.

If real estate is sold it normally produces a gain to be reported in the US?? What am I missing?

[TAXNJ]

Read burke's post

now i am confused since this seems to contradict this definition:
Interests in specified foreign financial assets
you have an interest in a specified foreign financial asset if 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 income tax return.

If real estate is sold it normally produces a gain to be reported in the us?? What am i missing?

question arose concerning whether a us citizen has to report value of real estate (non income-producing) held in another country. It looks like 8938 is just for monies in financial institutions. So there is no requirement for reporting property ownership unless it is sold and converted to cash?

If you read Burke's Post it says (also see above) "question arose concerning whether a us citizen has to report value of real estate (non income-producing) held in another country." Think Burke is saying, if necessary for reporting property ownership!

[Gretel]

If you read Burke's Post it says (also see above) "question arose concerning whether a us citizen has to report value of real estate (non income-producing) held in another country." Think Burke is saying, if necessary for reporting property ownership!

Thanks, that wasn't my problem but I noticed what was. I missed that reporting applies to "Financial Assets" only. I am too tired.