manny1980

Hello:

I have joint bank accounts with my mother in the UK, which in dollar totals approx. $170K (my share on paper $85K). The interest earned on this account contributes to my mother's income. However, on paper, my share comes around to approx. $85K. I lawfully filled FBAR last year for this but I heard about the new FATCA that came into law this year. According to the instructions for this form, a single taxpayer with anything above $50,000 has to file for 8938, which increases to $100,000 for joint tax return with your spouse.

I, individually, has $85K share (as stated above) abroad for year 2011 but, how I understand, because I file my taxes jointly with my wife and according to one of the examples in the instructions for filing, because I file jointly with my spouse, I will be exempted for filing this form as this threshold is below 100K for joint filing.

But...what confuses me most about this rule is that FATCA is required for tax years beginning after March 18 2010 (Page 1 of the instructions) and in July 2010 was when I had these accounts opened with my mother and at that time my share was $103,000 for year 2010 only (now my share is less as this money was my mother with my name jointly to ensure in case banks go bust and she does not lose out any money via FSA).

....I am totally lost as to how I am required to report this to the IRS if the FATCA rule came into law only recently? Whats frustrating is I am just $3K above the threshold for 2010 but I want to comply everything as per the rules

And, I am suppose to now report this also for 2011 even though our foreign amount was below the $100K mark? If anyone knows how to approach this please help as we want to sort this out asap

Bob

FATCA has bugger all to do with the UK and UK taxes, so you'd probably have better luck posting in the US forum as quite a few folks have come upon this and needing to file.

I've no idea about the answers nor if this exact situation has come up, but if you do a search you might at least get some ideas for resources to look at as there have been a lot of links to various information on this in the last few months

manny1980

Actually, in my case it is also to do with UK as I shall be returning to the UK sometime this year so I want to make sure I do things lawfully.

Maybe you can shift my question or direct me to the appropriate US forum regarding these tax concern.

jbrown

Your description is a little unclear TBH, and you'd do well to get professional advice.

However, my understanding is that the FACTA provision applies to tax years after 2010 which means the filing made this year, 2012, for tax year 2011.

http://www.irs.gov/businesses/corpor...236664,00.html

"For most taxpayers this will be the 2011 tax return they file during the 2012 tax filing season." I'm not sure of the scenarios for earlier filings. Also see:

http://www.irs.gov/businesses/corpor...251217,00.html

I believe the question of joint filing is a moot point because you do not file taxes jointly with your mother in the US (unless this asset was somehow transferred to your wife with whom you file jointly in the US?)

If I recall correctly, the FACTA asks about whether you need to file an FBAR, so there's a cross-check in there.

Also note that there are separate reporting thresholds for the end of the tax year and an amount exceeded during the tax year (e.g. $50K at the end or $75K at any one time). I don't believe there are penalties for filing unnecessarily, but there are certainly penalties for not filing.

manny1980

Thanks Jbrown for your reply.

In the US, one can only file joint tax-returns with their spouse not with any parent. However, according to the instructions for provided on http://www.irs.gov/pub/irs-pdf/i8938.pdf, as quoted from an example scenario in Page 3 of the instructions:
This to me implies that even though my wife does not own any assets abroad but because we file our taxes jointly, we may come under $100K requirement not $50K for single tax-filer. Anyways, I am considering contacting IRS directly, hopefully I can get some answers.

Thanks again buddy.

Bob

It's still a tax filing issue that has nothing to do with the UK and if you're moving to the UK will only affect you if you're a US citizen or a US LPR.

I can't move this thread to the US forum as I'm not a mod here, though I'm sure you could ask one to do that.

The main US forums are here - http://britishexpats.com/forum/forumdisplay.php?f=57

jbrown

FWIW, it applies to anyone resident for tax purposes that meets the FACTA requirements (e.g. in the year of departure from the US), not just US citizens and LPRs.

manny1980

It does matter to many here who are immigrating from the US to the UK for tax purposes, which most likely are going to be either US citizens, residents or US LPR.

Bob

And again, it's a US tax filing issue, not a UK one.

Like I said, there are plenty of threads in the US forum that have discussed FBAR and FACTA issues, which would be a good start to search out to see if you find your answer.

robin1234

Tax years beginning after March 18 2010... that is, for most people who are on a calendar year tax year, the 2011 tax year is the first we need to file for. So you do NOT need to file the 8938 for 2010, because that tax yr began Jan 1, 2010... Even if you have doubts as to whether it applies to you, I'd file it anyway. Not too much extra work, as you'll have gathered all the relevant facts and figures for your FBAR and your 1040 Schedule B, I assume..

manny1980

That is your opinion and I may not agree with it, but I respect your opinion. The whole purpose here is to help others and this is specifically for concerns regarding people "Moving Back to the UK". Although it is disappointed as I expected a more responsible reply from someone who supposedly has a title of a "Moderator". Thank you.

manny1980

Thank you Robin, I really appreciate your help. I have looked elsewhere and found similar response but I may take up on your suggestion and fill the form anyways.

robin1234

I'm quite exercised about this Form 8938 requirement. It is an example of the confusion that the web can cause, in terms of the information (including documents direct from the IRS) that comes up from a simple search using a search engine such as Google. Most documents that come up say the Form 8938 is still a draft, a future (not present) requirement. Well, the final version of Form 8938 was published sometime in December 2011, so now we do have to submit it for 2011. I actually called the IRS helpline about two weeks ago to confirm this.

Pollyana

Moved to the US forum. There's a redirect in the UK one so people there can find it here

manny1980

Awesome Pollyana, I appreciate your help to also place a redirect in the UK!