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In additional you should report a foreign account by
(1) completing boxes 7a and 7b on Form 1040 Schedule B - http://www.irs.gov/pub/irs-pdf/f1040sb.pdf .
(2) you are a subject of FBAR reporting if a foreign account value is above $10,000. The form to use is TD F 90-22.1 - this form is mailed separately. There is no tax associated with these reporting.
(3) you need to file form 8938 - if your amount is more than $50,000 www.irs.gov/pub/irs-pdf/f8938.pdf - that form is attached to your tax return.
The Foreign Account Tax Compliance Act (FATCA) is an important development in U.S. efforts to improve tax compliance involving foreign financial assets and offshore accounts.
Reporting is required if you have an interest in specified foreign financial assets. A specified foreign financial asset is:
-- Any financial account maintained by a foreign financial institution, except as indicated above
--Other foreign financial assets held for investment that are not in an account maintained by a US or foreign financial institution, namely:
Financial interest: you are the owner of record or holder of legal title; the owner of record or holder of legal title is your agent or representative; you have a sufficient interest in the entity that is the owner of record or holder of legal title.
Signature authority: you have authority to control the disposition of the assets in the account by direct communication with the financial institution maintaining the account.
If you a custodial for the minor - you need to file the form for the minor as a holder of legal title and for yourself - because you have authority to control.
See for reference
Let me know if you need any help or clarification.
Thank you for your timely response. It seems that real estate holding overseas need not be reported, correct?That is correct - only financial accounts are reported. If you own a real estate property - no need to report that. If the assets of a minor is held by a trustee who is not me, or a US citizen, is the minor exempt from FABR reporting?The minor is not exempt from reporting. Whoever is in charge of minor's financial affair would take care for reporting. Mainly that is a responsibility of parents.If taxes on income are paid at the source to a foreign government all the above reporting is still required, it is just a deductible item on the 8938 form, correct?
The form 8939 is only report the fact of having financial accounts - it has nothing to do with taxable income.
The taxable income is reported on the tax return - US citizens should use form 1040 and report all worldwide income.
However - if the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 - http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdfThe credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.
Let me know if you need any help.