The IRS has added nine new questions and answers addressing the filing requirements for Form 8938, Statement of Foreign Financial Assets. These new Q&A address a variety of issues including whether tangible assets such as art, antiques, jewelry, cars and other collectibles held in a foreign country must be reported on Form 8938 (Q&A 19) and whether precious metals (Q&A 20) or safe deposit boxes (Q&A 21) in foreign countries must be reported on Form 8938.
The IRS also clarified issues about valuation of foreign financial assets. Q&A 15 states that assets with a de minimis maximum value must be included on Form 8938 if a taxpayer meets the applicable reporting threshold. Q&A 23 clarifies that taxpayers holding an interest in a foreign defined benefit plan are not required to obtain an appraisal by a third party to estimate the asset’s maximum value during the tax year. Rather, taxpayers are permitted to rely on periodic account statements which reflect a reasonable estimate of the maximum value of the account during the tax year or, if statements are not issued, taxpayers may rely on information publicly available from reliable financial information sources.
The IRS Q&A’s for Form 8938 are available here: http://www.irs.gov/businesses/corporations/article/0,,id=255061,00.html.
