Major Forms for Individuals with Foreign Assets, Activities, and/or Residence

There are some key forms related to individuals that report foreign information. The forms listed below are a good starting place and should all be discussed with your qualified tax preparer.

Form Name Description Read More
Form 1040, Sch. B, Part III Foreign Activity on Form 1040 · Documents foreign assets & interaction with foreign trusts on the individual return.

· DO NOT skip over this form in haste.

Don’t Forget Your Foreign Bank Account Report (FBAR)!
Form 1040NR U.S. Nonresident Alien Income Tax Return · Filed by nonresident aliens

· Reports FDAP (fixed, determinable, annual, or periodic) income & ECI (effectively connected income with a US trade or business) for US tax purposes.

Are You A Resident Or A Non Resident?
Form 1116 Foreign Tax Credit · Shows foreign income & foreign expenses in an effort to eliminate double taxation on income between different countries.

· Separates income into specific buckets,

· Only considers creditable taxes, and

· Taxes attributable to excluded income are not allowed.

Foreign Property- Reporting My Ownership and Income
Form 2555 Foreign Earned Income · Documents foreign earned income & either the results of the bona fide residence test or physical presence test.

· Once a test is passed, the form calculates the exclusion of income & housing deduction or exclusion.

Foreign Property- Reporting My Ownership and Income

Individual Retirement Accounts & Foreign Earned Income

Form 8621 Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund · Reports on activity of passive foreign investment companies (PFICS) – qualified electing funds, mark to market funds, or section 1291 funds.

· It deals with distributions, sales, and annual incomes or unrealized gains/losses.

Foreign Mutual Funds & Passive Foreign Investment Companies

K-1s & Passive Foreign Investment Companies

Form 8938 Statement of Specified Foreign Financial Assets · Documents for the IRS specified foreign financial assets and their values during the year for taxpayers who cross a reporting threshold.

· The form can exclude from asset reporting: those specified foreign financial assets that are reported on other foreign forms (i.e. 5471, 8621, etc.)

Foreign Property- Reporting My Ownership and Income

Don’t Forget Your Foreign Bank Account Report (FBAR)!

Form 114 Report of Foreign Bank & Financial Accounts (FBAR) · Discloses to FinCEN the foreign accounts and values during the year for taxpayers who cross a reporting threshold. Filing must be e-filed. Don’t Forget Your Foreign Bank Account Report (FBAR)!
Form 3520 & 3520A Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts & Annual Information Return of Foreign Trust with a U.S. Owner · Form 3520 documents the US person’s activity with a foreign trust (contributions, distributions, etc.) and foreign gifts/bequests.

· Form 3520-A documents the financial information for the foreign trust and provides the documents for the owner and beneficiary to file their Form 3520.

Foreign Trust Reporting 

The Basics of Form 3520

Received a Foreign Gift/ Bequest… Now What?

Foreign Reporting: What to do if You Forget to File

Form 5471 Information Return of U.S. Persons with Respect to Certain Foreign Corporations · This form deals with ownership changes in foreign corporations, ownership of a controlled foreign corporation, and subpart F income.

· This form reports the foreign financial information and tracks the earnings & profits in various buckets (post 1986 undistributed earnings, previously taxed, etc.).

 10 Tips for Reporting Certain Foreign Corporations 
Form 8865 Return of U.S. Persons with Respect to Certain Foreign Partnerships · Reports control of foreign partnerships, transfers to foreign partnerships, and acquisitions/ dispositions/changes in foreign partnership interests.

· This form also discloses related party transactions.

Foreign Entity Filings- Form 8865 and 8858
Form 8858 Information Return of U.S. Persons with Respect to Foreign Disregarded Entities · Filed by those with foreign disregarded entities to disclose financial information, ownership, and related party transactions. Foreign Entity Filings- Form 8865 and 8858
Form 926 Return by a U.S. Transferor of Property to a Foreign Corporation · Documents transfers to foreign corporations that exceed a certain amount or pertain to a certain ownership level.

· This form has additional considerations if transferred by a partnership.

Form 8802 Application for United States Residency Certification – Additional Certification Requests · Filed to request a Form 6166 certificate of residency.

· Often for tax treaty purposes with another country.

· Can also be used for value add tax (VAT) purposes.

How do I Prove US Residency for Foreign Purposes  
Form 8833 Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) · Documents treaty based positions taken in the return that either overrule or modify a provision of the internal revenue code and cause a reduction in tax.

· Includes income tax treaties, estate & gift treaties, or friendship, commerce, navigation treaty

Form 8854 Initial and Annual Expatriation Statement · Filed to establish expatriation for tax purposes.

· Very important to have good counsel and to consider the last several years’ history.

· Must consider property & deferred compensation plans depending on date of expatriation.

W-8 Form Series Certificates related to foreign status · These are to be provided to withholding agents for proper withholding based on: beneficial ownership of income, effectively connected income, connection to foreign government/organization, or for flow through.

 


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