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 |
| 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 |
| 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 |
| 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 |
| 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. |
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| 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 |
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| 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. |
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| 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. |
Contact us for help with your foreign taxation needs.