Form 8938 Checklist: 2016 Tax Year Statement of Specified Foreign Financial Assets
Purpose & 2016 Context:
Form 8938 requires U.S. citizens, residents, and certain nonresidents to disclose specified foreign financial assets exceeding reporting thresholds under the Foreign Account Tax Compliance Act (FATCA). For filers of the 2016 tax year, the international tax reporting regime under IRC §6038D applies, with complete asset categorization into deposit/custodial accounts and other foreign assets.
This year marks the stabilization of asset value brackets and institutional identification protocols following the initial FATCA rollout phases. Beginning in 2016, certain specified domestic entities (closely held corporations, partnerships, and trusts) must also file Form 8938 if they meet threshold requirements, expanding international tax compliance obligations beyond individual taxpayers.
Filing Requirements Checklist
1. Determine Filer Status & Threshold Applicability
Identify whether you are a specified individual, partnership, corporation, or trust per the 2016 instructions. For selected individuals, confirm whether the aggregate maximum value of specified foreign financial assets exceeds the applicable threshold for your filing status during the tax year.
The 2016 instructions specify distinct thresholds by filing status and residency: unmarried individuals living in the U.S. must file if assets exceed $50,000 on the last day of the year or $75,000 at any time; married filing jointly residing in the U.S. must file if assets exceed $100,000 on the previous day or $150,000 at any time. Higher thresholds apply to taxpayers living abroad. For specified domestic entities, the threshold is $50,000 on the last day of the tax year or $75,000 at any time during the year.
2. Classify Each Asset into Part I or Part II Categories
Foreign deposit accounts and custodial accounts (Part I) must be separated from all other foreign assets (Part II). For 2016, only accounts held at foreign financial institutions qualify for Part I reporting. Accounts at U.S. branches of foreign banks are not specified as foreign financial assets under Foreign Account Tax Compliance Act regulations and are entirely excluded from Form 8938 reporting—they are treated as domestic accounts for FATCA purposes.
Complete Part I summary lines with account counts and maximum values; complete Part II summary lines with asset counts and maximum values for other foreign assets such as foreign stocks, partnership interests, and derivative contracts held outside financial accounts.
3. Complete Type of Filer Box (Line 3)
Check only one box: (a) Specified individual, (b) Partnership, (c) Corporation, or (d) Trust. For 2016, partnerships, corporations, and trusts must provide closely held information on line 4, as specified in the instructions for the definition of the person. If multiple specified individuals are required to be identified, prepare continuation statements listing each person separately with their name and taxpayer identification number.
4. Report Closed Accounts & Dispositions in Applicable Summary Sections
On Part I, line 5, indicate whether any foreign deposit or custodial accounts were closed during 2016. On Part II, line 3, indicate whether any foreign assets were acquired or sold during 2016. The 2016 instructions require tracking of opening and closing dates; continuation statements must include specific dates for accounts opened or closed within the tax year to provide a complete record of asset holdings throughout the reporting period for international tax compliance purposes.
5. Complete Part III Tax Items Summary (All Asset Categories)
For each asset category (Foreign Deposit/Custodial Accounts and Other Foreign Assets), report all applicable tax items: interest, dividends, royalties, other income, gains/losses, deductions, and credits. In columns (d) and (e), identify the specific form and line number where each tax item appears on your 2016 return or attached schedules.
Report only actual tax items that exist—if no tax items are attributable to a particular asset category, simply report those items that do exist without artificial placeholders. This ensures accurate international tax reporting and proper coordination with your income tax return.
6. Report Excepted Assets on Part IV
If you filed Forms 3520, 3520-A, 5471, 8621, or 8865 during 2016, enter the number of forms filed in Part IV. Assets reported on these forms are treated differently depending on the filer type under Foreign Account Tax Compliance Act rules. Specified individuals must include excepted assets when calculating whether they meet reporting thresholds, but report them only in the Part IV summary; detailed information in Parts V and VI is not required for these excepted assets.
Specified domestic entities exclude the value of excepted assets entirely from threshold calculations and do not report them in Parts V or VI. The 2016 instructions clarify that Part IV is summary-level reporting only, avoiding duplication in international tax filings.
7. Complete Part V for Each Foreign Deposit and Custodial Account
For every account not excepted under Part IV, provide the account type (deposit or custodial), account number or designation, opening and closing dates if applicable during 2016, whether it is jointly owned with a spouse, maximum value during the tax year in U.S. dollars, and foreign currency conversion information if used.
If the maximum value exceeds $1 million, the 2016 instructions may require notation of multiple accounts held at the same institution. Attach continuation statements for each additional account using the identical format shown on the main form to ensure complete international tax disclosure.
8. Complete Part VI for Each Other Foreign Asset
For every non-excepted foreign asset, provide the asset description, identifying number or other designation, acquisition and disposition dates if applicable during 2016, maximum value during the tax year, and foreign currency conversion method if used.
For maximum value reporting, check the appropriate bracket: (a) $0–$50,000, (b) $50,001–$100,000, (c) $100,001–$150,000, (d) $150,001–$200,000, or (e) if exceeding $200,000, check box (e) and enter the specific dollar amount. For foreign entity stock or interests, enter the entity name, type of entity, and mailing address; for other assets such as derivatives or debt instruments, enter the issuer or counterparty name, type, and address.
9. Report Global Intermediary Identification Numbers (GIIN) Where Available
The 2016 form includes optional GIIN fields (Part V, line 7b; Part VI, lines 7b and 8b). While optional and not required under Foreign Account Tax Compliance Act regulations, the instructions recommend entering the GIIN of the foreign financial institution or foreign entity if available to facilitate FATCA information exchange reporting coordination between international tax authorities. Do not delay filing if GIIN information is unavailable—the field is provided for convenience but is not mandatory.
10. Verify Foreign Currency Conversion Documentation
If you used a foreign currency exchange rate to convert account or asset values to U.S. dollars, complete the currency conversion section (Part V, line 6 or Part VI, line 6). Specify the foreign currency, the exchange rate used, and the source of the rate. Use the U.S. Treasury Bureau of the Fiscal Service rate (available at fiscal.treasury.gov) when available.
If no Treasury rate exists, use another publicly available exchange rate for purchasing U.S. dollars and disclose the source on Form 8938. You may also rely on the foreign currency conversion rate reflected in financial account statements issued at least annually by the financial institution maintaining the account. Proper currency conversion ensures accurate international tax reporting and compliance with FATCA valuation requirements.
11. Attach Continuation Statements for Multiple Accounts or Assets
If you have more than one foreign deposit account, custodial account, or other foreign asset requiring detailed reporting, prepare a separate continuation statement for each additional account or asset using the format shown on the main form pages. Number each continuation statement sequentially and attach all pages to Form 8938 before attaching to your 2016 tax return to provide complete international tax disclosure.
12. Verify Compliance with Assembly and Signature Requirements
Form 8938 must be attached to your complete 2016 tax return (Form 1040, Form 1041, Form 1065, Form 1120, or Form 1120-S). The form is not a standalone submission and cannot be filed separately. Ensure your tax return is signed and dated per the specific return form’s signature requirements.
The 2016 instructions state that Form 8938 must be filed as part of the complete return package; incomplete or unsigned returns will not satisfy the Foreign Account Tax Compliance Act filing requirement and may result in penalties of $10,000 for failure to file, with additional fines up to $50,000 for continued non-compliance.
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.
2016 Tax Year Specific Updates
FATCA Stabilization Phase: The 2016 instructions reflect the full implementation of IRC §6038D under the Foreign Account Tax Compliance Act, with a consistent asset categorization methodology and institution identification protocols.
The 2016 tax year introduces specified domestic entity reporting requirements for closely held domestic corporations and partnerships that meet the passive income or passive asset tests, significantly expanding Form 8938 filing obligations beyond individual taxpayers and strengthening international tax compliance enforcement mechanisms for the first time.
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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.
