nun

Here's an ok link and here's the particular paragraph about real estate. There isn't much, which makes it all the more difficult to know if you are doing things right.

http://www.journalofaccountancy.com/...g/20102736.htm

FATCA is still evolving and it's interpretation will probably take a while to work out. For example if you bought the house before coming to the US does it come under FATCA? So I'd talk to a tax adviser, but for me I would declare anything that I thought might be a foreign asset over the dollar limits to avoid the potential fines. Remember you should be declaring income gains etc from all your foreign assets if you are a US taxpayer and FATCA is really just a "big stick" to make sure you follow the existing IRS rules.

im9907620

I reported on here previously that FBAR covers things like UK personal pension plans, ISAs (cash and shares types), onshore and offshore bonds. The new Act means that a foreign financial institution has an obligation to report your accounts/assets so if you don't - and your accounts exceed the thresholds stated - then they will....so the IRS will find out anyway (in theory!).

As most of us know, ignorance will be no defence when it comes to the IRS, so prompt your CPAs or Accountants and don't assume they will be doing things as a matter of course

I guess there'll be a few racing to check their savings, investment and pension balances............

sir_eccles

I have yet to have seen anything definitive in relation to final salary/defined benefit pension schemes.

Obviously one gets an annual statement defining its value in terms of "if you retired now you would get a lump sum of X and and pension of Y" but that isn't based on monetary contributions invested into an account. It's merely an actuarial calculation based on time served. How does one report that if at all?

Jerseygirl

How can an US Act dictate to foreign institutions? UK banking laws are very strict...they can't give out my personal details without my permission or a UK court order.

nun

I have 25 years of NI payments and hope to get a UK basic state pension. Could that be a foreign asset under FATCA? Also what about assets that were purchased before coming to the US? like a house

nun

The European banks are pointing out that FATCA is in violation of EU privacy laws. The US can't make EU banks comply with FATCA, but if they don't the IRS will levy a 30% withholding tax on any assets they have in the US. Of course the IRS will make US tax payers comply with FATCA. This is all still under discussion. There might yet be tiered implementation where FATCA isn't necessary for accounts and assets in countries with similar taxation regimes as the US ie those that aren't tax havens. We'll have to see what happens this year.

celticgrid

I don't think that's quite right. The 30% levy is not on assets, but on any assets transferred from the US to the foreign institution. Just having the assets in the US is not an issue.

However, this aspect (of the US dictating to foreign banks) is one that is being talked of as driving investors away from the US. Investors will be potentially punished because their local bank is not signed up to what the US Government wants. So the investor will not put any more money into the US but will find somewhere less authoritarian to make money.

The FBAR/FATCA reporting hassles potentially drive the thought process...."I'll move all my overseas money to the US to cut out all that reporting nonsense". But the FATCA grief then comes in if you want to transfer any of that asset OUT of the US, if the place you move it to hasn't signed up for information disclosure.

Not quite a Catch-22 situation but they are trying....Pass the paracetamol, nurse!

EU_Girl

Thanks nun! However, I still do not know and look for answer... FATCA is already alive? Or I do not need to be worried about FATCA reporting now but in the future? As far as I understand FATCA is not yet alive, but I might be wrong...all article about FATCA is not clear enough for me...
thanks.

nun

FATCA was sign into law in March 2010. However, the IRS are still working on it's interpretation and the required forms. FFI reporting starts Jan 1st 2013 so maybe the individual reporting will be required then too. I'm not sure.

EU_Girl

Thanks nun again. We still have time then...regarding FATCA.

zooqookoo

So is this actually what's happening? back file, stay compliant in the future and live happily ever after?

JAJ

See question 17:
http://www.irs.gov/businesses/intern...html?portlet=7

I have properly reported all my taxable income but I only recently learned that I should have been filing FBARs in prior years to report my personal foreign bank account or to report the fact that I have signature authority over bank accounts owned by my employer. May I come forward under this new initiative to correct this?

----

The purpose for the voluntary disclosure practice is to provide a way for taxpayers who did not report taxable income in the past to come forward voluntarily and resolve their tax matters. Thus, if you reported and paid tax on all taxable income but did not file FBARs, do not use the voluntary disclosure process.

For taxpayers who reported and paid tax on all their taxable income for prior years but did not file FBARs, you should file the delinquent FBAR reports according to the instructions (send to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late. The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and the FBARs are filed by August 31, 2011. However, FBARs for 2010 are due on June 30, 2011 and must be filed by that date.

zooqookoo

So I wonder if you failed to report a bit of interest income (foreign exemptions covered the tax liability) - no tax was due.... what category would that fall in?

you filed amended returns showing a bit more income - tax due is zero...

anybody seen this scenario?

MsElui

just becuase the money is in an account- it doesnt mean you are earning money on it. For instance - my husband transferred some money from his UK account into mine - and I transferred it into XE.com and sent it to the US. Yes it boosted my highest balance for the year - but it was in my account less than a day and i didnt earn much (if f any ) interest on it.

chopper40

MsElui
In your case, if the money was in your account as an "intraday" transfer then it probably dosn't show in your bank statements. If you had left the money in overnight then it would have shown, and if it was >$10,000 it would have triggered FBAR reporting. FBAR has got nothing to do with earning interest anyway.
On a similar note, I read that on IRS website that if you transfer money between accounts of the same person, that would not trigger FBAR reporting. E.g. you transfer $5001 dollars from a current account into a savings account, total amount would not be counted as $10002 (which would have triggered an FBAR reorting requirement)