Foreign Bank Accounts, Gifts... What you Need to Report

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Foreign Bank Accounts, Gifts... What you Need to Report

Written by Mike DiSabatino

Monday, 26 July 2010 23:47

Are you required to inform the IRS of your foreign bank accounts, business interests, gifts or inheritances? Here, we will review the basic filing requirements that you should be aware of. We encourage all clients to review this and discuss all foreign transactions with us to determine the proper reporting requirements. Although tax implications may not be involved, the penalties can be severe for failure to comply with the filing requirements.

Here are the requirements:

1. Foreign Gifts

If you received gifts of money or other property from a foreign source, you may need to report these gifts to the IRS. You must report to IRS if you received:

Gifts or bequests valued at more than $100,000 from a nonresident alien individual / family or foreign estate (including foreign persons related to a nonresident alien or foreign estate); or

Gifts valued at more than $13,258 (adjusted annually for inflation) from foreign corporations or foreign partnerships (including foreign persons related to foreign corporations or partnerships).

2. Foreign Bank Accounts

You must report to IRS if you have financial interest in or authority over any financial account(s) in a foreign country and the total of these account(s) exceeds $10,000 at any time during the calendar year.

3. Interest in a Foreign Corporation

If you are an officer or director of a foreign corporation and own 10% or more of the stock or maintain control of a foreign corporation for at least 30 days, we need to know. Also, if you own stock in a Controlled Foreign Corporation (CFC) for 30 days or more and hold that stock on December 31, we need this information before filing your annual tax return.

Don't worry, we are here to help!

The guidelines involving foreign bank accounts and corporations are complicated and it is our job to determine if any filing requirements apply to you. Just keep in mind that if you have been involved in such transactions or anticipate that you might be in the future, it is important to let us know!

As always, we are here to serve YOU as your CPA.

Last Updated on Tuesday, 27 July 2010 00:12

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taxes DiSabatino, CPA offers tax preparation for individuals, businesses, non-profit entities, estates and trusts. Our experience expands beyond California to all US States and multi-State tax returns.

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code. Please make an appointment to discuss your particular situation for proper advice.