New Form 8938 for financial asset reporting adds significant complexity to this year's individual income tax return preparation

Private Company Services Tax Insight

The IRS recently released temporary and proposed regulations implementing section 6038D, which requires reporting of a specified foreign financial asset (SFFA). If reporting is required, taxpayers must disclose their SFFA holdings on Form 8938, Statement of Specified Foreign Financial Assets, with their U.S. federal income tax returns. New Form 8938 applies only to individual taxpayers; until further guidance is issued, domestic entities are not required to file Form 8938. If applicable, new Form 8938 must be filed with a tax return for tax years beginning after March 18, 2010. In most cases, individuals meeting the thresholds will be required to file Form 8938 with their 2011 tax returns due on April 17, unless an extension is filed.

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