U.S Tax law requires substantial amount of financial information. If you or your family members control directly or indirectly any non-US corporation and you have holdings in it, you must disclose it. You can use for 5471 for each foreign corporation.
The IRS uses this information, among other things, to help determine your liability for tax on any undistributed income of closely held non-US corporations that earn passive income.
If you have investments in foreign partnerships or foreign disregarded entities you must report it. Form 8865 is used for reporting interest in foreign partnerships and form 8858 is used to report interest in foreign disregarded entities.
You must file annually a report of Foreign Band and Financial Accounts. This is reported to U.S Department of Treasury and is due by June 30 of each year. This form is required if the total value of your foreign bank accounts, brokerage accounts or RRSP accounts exceed USD10,000. There are heavy penalties for violations.
Statement of financial assets is reported on form 8938. The dollar threshold, which depends on your filing status and where you live, can be as low as USD 50,000 of foreign financial assets. A higher threshold applies for taxpayers living outside the U.S. It is USD 200,000 for unmarried or married filing separately and USD 400,000 for married filing jointly.
If you receive gifts or bequests over USD 100,000 in a year you are required to report these. You use form 3520 for reporting any transfer to and from foreign trusts and estates. Form 3520A is used for reporting if you are treated as the owner of a foreign grantor trust. Form 3520 is due at the same time as your U.S personal tax return. Form 3520A is due on March 15.
If you have a TFSA account or you have contributed to an RESP account use form 3520A to report these. Income on RESP and TFSA accounts should be reported on your U.S tax return.
Disclaimer:
This information is for educational purposes only. It does not constitute any legal advice or opinion. Please do not use any of its contents without seeking a professional advice.
References:
www.jct.gov/publications.html
KPMG Tax Planning for you and your family 2014
U.S Taxation of International Transactions by Robert J. Misey, Michael S. Schadewald
Introduction to United states International Taxation by Paul R. McDaniel, Hugh j. Ault and James R. Repetti
International Taxation by Joseph Isenbergh
Mansoor Suhail (Mani)
Accountant
BSBA – EA – ICIA – RA
Tax for Canada and U.S.A
Web: www.theaccountingandtax.com and www.taxservicesguru.com
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