Form 114

[Bonnie]

Is anyone familiar with the Form 114. I have a client who is in Honduras doing mission work. He and his family moved there is Oct 2013 and have lived there all of 2014 and are still there. He just asked if he needed to fill out the form 114 because he had over 10,000 in an account there at one point in 2014. I have never dealt with this so just wondering. I do see there is a deadline of June 30th which is past.

Second scenario another client asked recently for future reference. He is US citizen born here, married to a lady originally from Guatamala who is totally legal in US and works here now. Prior to her coming to the US she had a law suit in Guatamala over something work related there. The law suit has awarded her 100,000 which at this point they have not gotten. He says the money will be deposited in a bank account in Guatamala and then they plan to transfer it to a bank account here in the US. He is wondering if he is going to get taxed when he transfers the money. Assuming he will need to do the Form 114 next year to show this money was in the account in Guatamala at one point during the year.

Thanks for any help on either of these similar but different situations

[Snaggletooth]

Guatemala Income

Won't speak to the Form 114, but will try the Guatemala income.

If this is an award from legal proceedings maybe the first item of business would be to see if it is taxable at all. Not all legal awards are taxable. That opens a different discussion and I won't go down that road at this time.

Assuming the award is taxable, the income is reportable to the wife when the award is realized, not when it is transferred to the US.
Keeping the money in a foreign account doesn't relieve her of the responsibility to report timely when the money is realized.

[AZUKHiker]

Yes needs to file Form 114

Is anyone familiar with the Form 114. I have a client who is in Honduras doing mission work. He and his family moved there is Oct 2013 and have lived there all of 2014 and are still there. He just asked if he needed to fill out the form 114 because he had over 10,000 in an account there at one point in 2014. I have never dealt with this so just wondering. I do see there is a deadline of June 30th which is past.

Yes, as the balance was greater than $10,000 at any time in 2014 he is required to file form 114. The 2014 form is late and could be subject to late filing penalties. However if all interest income from the account has been reported on the US tax return then use the late filing procedure set out at the following link and there should be no penalty.


If the income from the account was not reported on the US tax return then look at following the streamlined filing compliance procedures as set out on this link

[Burke]

Also see the new time frames for filing and extensions just enacted in the Highway Act. Probably won't affect 2014, though.