Form 8938 (Rev. December 2014) Checklist
Purpose
Form 8938 requires U.S. citizens and residents to disclose specified foreign financial assets when the aggregate value exceeds certain reporting thresholds. These thresholds vary based on filing status and whether the taxpayer lives in the United States or abroad.
For taxpayers living in the United States, unmarried filers (including married filing separately) must report if the total value of specified foreign financial assets exceeds $50,000 on the last day of the tax year or $75,000 at any time during the year. Married taxpayers filing jointly living in the U.S. must report if assets exceed $100,000 on the last day of the year or $150,000 at any time during the year.
For taxpayers living abroad who meet the presence abroad tests, higher thresholds apply. Unmarried filers (including married filing separately) living abroad must report if assets exceed $200,000 on the last day of the year or $300,000 at any time during the year. Married taxpayers filing jointly who live abroad must report if assets exceed $400,000 on the last day of the year or $600,000 at any time during the year.
This form follows the rules of FATCA (Foreign Account Tax Compliance Act), as stated in Section 6038D of the Internal Revenue Code, and is separate from the FBAR filing rules under the Bank Secrecy Act. Filing Form 8938 does not relieve you of FBAR requirements if separately applicable.
Filing Steps
1. Determine your 2014 filing threshold based on filing status and residency location.
First, identify whether you lived in the United States or abroad during the tax year. You are considered living abroad if your tax home is in a foreign country. You meet one of two presence abroad tests: (a) you are a U.S. citizen who was a bona fide resident of a foreign country for an entire tax year, or (b) you are a U.S. citizen or resident present in a foreign country for at least 330 full days during any 12 months ending in the tax year.
Apply the appropriate thresholds:
● Unmarried or married filing separately, living in the U.S.: $50,000/$75,000
● Married filing jointly, residing in the U.S.: $100,000/$150,000
● Unmarried or married filing separately, living abroad: $200,000/$300,000
● Married filing jointly, living abroad: $400,000/$600,000
Verify that you are a specified individual required to file Form 8938. If you do not need to file an income tax return (Form 1040NR or Form 1040), you do not need to file Form 8938 even if you exceed the reporting thresholds.
2. Identify all specified foreign financial assets held during the 2014 tax year.
Specified foreign financial assets include (a) financial accounts maintained by foreign financial institutions and (b) the following assets if held for investment and not held in a financial account: stocks or securities issued by non-U.S. persons, interests in foreign entities (such as foreign partnerships), notes or bonds issued by foreign persons, interests in foreign trusts or foreign estates, and financial instruments or contracts with non-U.S. issuers or counterparties.
Note that assets can be reportable even if denominated in U.S. dollars, provided foreign individuals or entities issue them. Foreign financial institutions include foreign banks, foreign mutual funds, foreign hedge funds, and foreign private equity funds. Assets must be held for investment purposes to be reportable.
3. Calculate the total value of all specified foreign financial assets to determine if filing is required.
When calculating whether you meet the applicable reporting threshold, you must include the fair market value of all specified foreign financial assets on which you have an interest during the tax year. This includes assets that may be exempt from detailed reporting on Form 8938 because they are reported on other forms, such as Form 3520-A (Annual Information Return of Foreign Trust), Form 5471, Form 8621, or Form 8865. The values of these assets must be included in your threshold determination, even if detailed reporting is excluded.
Convert all foreign currency values to U.S. dollars using the exchange rate on the last day of the tax year. Use the U.S. Treasury Department’s Bureau of Fiscal Service foreign currency exchange rate for purchasing U.S. dollars (note: this agency was formed from the 2012 merger of the Financial Management Service and the Bureau of Public Debt). If no Bureau of Fiscal Service rate is available, use another publicly available exchange rate and document the source.
4. Complete Part I (Foreign Deposit and Custodial Accounts Summary)
Enter the total number of separate foreign deposit and custodial accounts reported on all Parts V of your Form 8938. Report the maximum aggregate value of all such accounts during 2014. Indicate whether any accounts were opened or closed during the tax year. Ensure your Taxpayer Identification Number appears correctly at the top of the form.
5. Complete Part II (Other Foreign Assets Summary)
Enter the total number of other specified foreign financial assets reported in all Parts VI. Report the maximum aggregate value of all such assets during 2014. Identify whether any assets were acquired or disposed of during the tax year. This section captures assets beyond deposit accounts, including interests in foreign estates, foreign partnerships, and other specified investments.
6. Complete Part III (Summary of Tax Items)
Categorize and report all interest, dividends, royalties, other income, gains, losses, deductions, and credits attributable to your specified foreign financial assets. For each tax item, link it to the exact form or schedule line on your 2014 tax return where it was reported (for example, Form 1040, Schedules B, D, or any other relevant schedules). This ensures consistency between asset disclosure and income reporting.
7. Complete Part IV (Excepted Specified Foreign Financial Assets)
If you reported specified foreign financial assets on other required forms, you may not need to provide detailed asset information on Form 8938. Enter the number of Forms 3520, 3520-A, 5471, 8621, and 8865 filed for 2014. Assets reported on these forms are excepted from detailed reporting in Parts V and VI of Form 8938, though their values must have been included in your threshold calculation.
Important note for 2014: Form 8891 (U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans) was obsoleted effective December 31, 2014, pursuant to Rev. Proc. 2014-55. If you have an interest in a Canadian RRSP or RRIF, you cannot use the Part IV exception and must report these assets in Part VI with full detail. Do not reference Form 8891 when filing Form 8938 for the 2014 tax year.
8. Complete Parts V and VI with detailed account and asset information.
For each foreign deposit or custodial account in Part V, provide the account designation, financial institution name, and complete address, account number, account opening and closing dates if applicable, maximum account value during the year, and foreign currency type if appropriate.
For each other foreign asset in Part VI (including Canadian RRSPs and RRIFs for 2014, as well as any interests in foreign estates), provide a complete asset description, identifying number or other reference, dates of acquisition or disposition if applicable during 2014, maximum value during the year (using specified ranges or exact amounts as instructed), foreign currency conversion information, and complete issuer or counterparty identification and address information.
Penalties and Compliance
Failure to file Form 8938 when required may result in criminal penalties under section 6038D, including an initial penalty of $10,000. If the failure continues for more than 90 days after IRS notification, an additional $10,000 penalty may apply for every 30 days, up to a maximum of $50,000. Underpayments of tax related to undisclosed foreign financial assets may trigger a 40% accuracy-related penalty.
2014 Year-Specific Conditions
The reporting thresholds for Form 8938 have remained unchanged since the implementation of FATCA for tax years beginning after March 18, 2010, under Section 6038D. These thresholds have not been adjusted for inflation and remain in effect without modification for the 2014 tax year.
The December 2014 revision of Form 8938 instructions clarified that beginning in 2014, U.S. taxpayers with Canadian RRSPs or RRIFs must report these assets in Part VI rather than using the Part IV exception, due to the obsolescence of Form 8891.
Maximum value reporting for Part II “Other Foreign Assets” uses tiered value ranges specific to the 2014 form revision, with categories for assets valued $0–$50,000; $50,001–$100,000; $100,001–$150,000; $150,001–$200,000; and over $200,000, requiring specific amount entry based on fair market value determination.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
