Form 8938 Checklist: 2019 Tax Year
Purpose
Form 8938 reports specified foreign financial assets when total values exceed IRS thresholds under the Foreign Account Tax Compliance Act. For 2019, required filers list each asset’s maximum value during the year and convert foreign currency using a year-end exchange rate. The form also aligns with other international reporting rules the IRS uses to track offshore holdings.
This requirement applies to foreign bank accounts, foreign brokerage accounts, foreign stocks, foreign mutual funds, foreign hedge funds, and cash value insurance issued outside the United States. It can also apply to interests in foreign partnerships, foreign corporations, foreign trusts, foreign pension plans, and similar foreign investments. Certain specified domestic entities may need to file when passive income or passive asset tests are met.
2019-Specific Filing Steps
Step 1: Determine status and eligibility
Confirm whether the filing is as a specified individual or a specified domestic entity. Specified individuals include U.S. citizens, resident aliens, and certain nonresident aliens who qualify under election or residency rules. Form 8938 is generally required only when an income tax return is needed for the 2019 tax year.
Step 2: Provide holder details for entities
When filing for a specified domestic entity, enter the identifying information for the closely associated specified individual. Include the required taxpayer details shown in the form instructions. Trusts that fall under the rules must also report current beneficiary information.
Step 3: Check the reporting threshold
Use filing status and residency to determine the correct threshold. U.S. residents who are unmarried or married filing separately generally file if their assets exceed $50,000 at year-end or $75,000 at any time. Married filing jointly generally file if assets exceed $100,000 at year-end or $150,000 at any time.
Step 4: Use the higher thresholds for taxpayers abroad
Apply the foreign tax home thresholds when the filer has a foreign tax home and meets the presence tests. Unmarried or married filing separately filers abroad generally file if assets exceed $200,000 at year-end or $300,000 at any time. Married filing jointly abroad generally file if assets exceed $400,000 at year-end or $600,000 at any time.
Step 5: Apply rules for specified domestic entities
A specified domestic entity generally files if its assets exceed $50,000 at year-end or $75,000 at any time during 2019. If no income tax return is required for 2019, Form 8938 is generally not filed. Threshold testing still applies when a return is required.
Step 6: Fill out Part I for foreign accounts
Enter the count of foreign deposit and custodial accounts held at foreign financial institutions. Indicate whether any accounts were closed during 2019. Closed accounts are still reported using the maximum value that was in effect during the period they were open.
Step 7: Fill out Part II for other foreign assets
The report specified foreign financial assets not listed in Part I, including foreign stocks and interests in foreign entities. Include foreign mutual funds, foreign hedge funds, foreign pension plans, and foreign deferred compensation interests when reportable. Note whether assets were acquired or disposed of during 2019.
Step 8: Complete Part III for related tax items
Report only tax items tied to the disclosed assets, such as interest, dividends, royalties, gains, losses, deductions, and credits. Link each item to its corresponding location on the tax return, as required. If an asset produced no tax items, leave the tax item entry blank while still reporting the asset.
Step 9: List accepted forms in Part IV
Enter other international forms filed for 2019, including Forms 3520, 3520-A, 5471, 8621, 8865, and 8858, when applicable. Assets reported on those forms generally are not repeated in the detailed sections of Form 8938. Individuals typically still include expected asset values for threshold testing, while specified domestic entities usually do not.
Step 10: Add account details in Part V
Provide account identifiers, institution details, and maximum value information for each foreign financial account. Include currency conversion information when accounts are denominated in foreign currency. The GIIN field is optional under the 2019 instructions, and leaving it blank does not trigger criminal penalties.
Step 11: Attach continuation statements for extra accounts
Attach a continuation statement for each account that does not fit on the main form. Use the continuation format provided after page two of Form 8938. Check the box and state the number of continuation statements included.
Step 12: Add asset details in Part VI
Provide details for each other-specified foreign financial asset, including description and identifying number when available. Include acquisition or disposition dates when they changed during 2019. Report maximum value and currency conversion details, along with issuer or counterparty information.
Step 13: Attach continuation statements for extra assets
Attach additional continuation statements when the space in Part VI is not enough. Use the same continuation format provided with the form. Ensure the total number of continuation statements is entered where required.
Step 14: Confirm what is reportable
Report foreign financial accounts and foreign investment interests that meet the Form 8938 definition. Do not report foreign real estate held directly or tangible property held directly. Foreign currency held directly is also excluded, and accounts at foreign branches of U.S. financial institutions are not reported on Form 8938.
2019 Year-Specific IRS Guidance Highlights
For 2019, the maximum value refers to the highest value recorded on any day during the year. If an asset was acquired or sold during 2019, the maximum value is measured only while it was held in the period. Currency conversion typically uses the exchange rate as of the last day of the year, even for assets disposed of earlier in the year.
Joint ownership rules affect both reporting and threshold testing. On a joint return, a jointly owned asset is typically listed once at full value. Married filing separately filers normally include one-half of jointly owned assets with a spouse. Joint ownership with a non-spouse is generally valued at full value for threshold testing purposes.
Final Reminder
Form 8938 is separate from FinCEN Form 114, also called the FBAR. The FBAR uses a $10,000 aggregate threshold and is filed through the BSA E-Filing System. Form 8938 must be attached to the 2019 income tax return and filed by the due date, including extensions. If an error is found later, it is corrected through an amended return.
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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.
