8938 Instructions for Form 8938

Caution: DRAFT—NOT FOR FILING
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2018

Department of the Treasury
Internal Revenue Service

Instructions for
Form 8938

DRAFT AS OF
October 18, 2018

Statement of Specified Foreign Financial Assets
Section references are to the Internal Revenue
Code unless otherwise noted.

General Instructions

Future developments. For the latest
information about developments related
to Form 8938 and its instructions, such
as legislation enacted after they were
published, go to IRS.gov/Form8938.

Reminders
Specified domestic entity reporting.
For tax years beginning after December
31, 2015, certain domestic corporations,
partnerships, and trusts that are
considered formed or availed of for the
purpose of holding, directly or indirectly,
specified foreign financial assets
(specified domestic entities) must file
Form 8938 if the total value of those
assets exceeds $50,000 on the last day
of the tax year or $75,000 at any time
during the tax year.
For more information on domestic
corporations, partnerships, and trusts
that are specified domestic entities and
must file Form 8938, and the types of
specified foreign financial assets that
must be reported, see Who Must File,
Specified Domestic Entity, Specified
Foreign Financial Assets, Interests in
Specified Foreign Financial Assets, and
Assets Not Required To Be Reported,
later.

Purpose of Form

Use Form 8938 to report your specified
foreign financial assets if the total value
of all the specified foreign financial
assets in which you have an interest is
more than the appropriate reporting
threshold. See Reporting Thresholds,
later.
Filing Form 8938 does not
relieve you of the requirement to
CAUTION file FinCEN Form 114, Report of
Foreign Bank and Financial Accounts
(FBAR), if you are otherwise required to
file the FBAR. See FinCEN Form 114
and its instructions for FBAR filing
requirements. See Comparison of Form
8938 and FBAR Requirements,
available at IRS.gov/Businesses/
Comparison-of-Form-8938-and-FBAR-

!

Oct 17, 2018

Requirements, for a chart comparing
Form 8938 and FBAR filing
requirements.

When and How To File

Attach Form 8938 to your annual return
and file by the due date (including
extensions) for that return.
An annual return includes the
following returns.
• Form 1040.
• Form 1040NR.
• Form 1041.
• Form 1041-N.
• Form 1065.
• Form 1120.
• Form 1120-S.

A reference to an “annual return” or
“income tax return” in the instructions
includes a reference to any return listed
here, whether it is an income tax return
or an information return.

!

CAUTION

return.

Do not send a Form 8938 to the
IRS unless it is attached to an
annual return or an amended

Who Must File

Unless an exception applies, you must
file Form 8938 if you are a specified
person (see Specified Person, later) that
has an interest in specified foreign
financial assets and the value of those
assets is more than the applicable
reporting threshold.
If you are required to file Form 8938,
you must report the specified foreign
financial assets in which you have an
interest even if none of the assets
affects your tax liability for the year. See
Specified Individual, Specified Domestic
Entity, and Reporting Thresholds, later.
Exception if no income tax

TIP return required. If you do not

have to file an income tax return
for the tax year, you do not have to file
Form 8938, even if the value of your
specified foreign financial assets is
more than the appropriate reporting
threshold.

Cat. No. 55389W

Specified Person

A specified person is either a specified
individual or a specified domestic entity,
defined later.

Specified Individual

You are a specified individual if you are
one of the following.
• A U.S. citizen.
• A resident alien of the United States
for any part of the tax year (but see
Reporting Period, later).
• A nonresident alien who makes an
election to be treated as a resident alien
for purposes of filing a joint income tax
return.
• A nonresident alien who is a bona
fide resident of American Samoa or
Puerto Rico. See Pub. 570, Tax Guide
for Individuals With Income From U.S.
Possessions, for a definition of bona
fide resident.
Resident aliens. You are a resident
alien if you are treated as a resident
alien for U.S. tax purposes under the
green card test or the substantial
presence test. For more information,
see Pub. 519, U.S. Tax Guide for
Aliens. If you qualify as a resident alien
under either rule, you are a specified
individual.
Special rule for dual resident taxpayers. If you are a dual resident taxpayer
(within the meaning of Regulations
section 301.7701(b)-7(a)(1)), who
determines his or her income tax liability
for all or a part of the tax year as if he or
she were a nonresident alien as
provided by Regulations section
301.7701(b)-7, file Form 8938 as
follows:
Specified individual filing as a
nonresident alien at the end of his or
her tax year. You are not required to
report specified foreign financial assets
on Form 8938 for the part of your tax
year covered by Form 1040NR or Form
1040NR-EZ, provided you comply with
the filing requirements of Regulations
section 301.7701(b)-7(b) and (c),
including the requirement to timely file
Form 1040NR or Form 1040NR-EZ, as
applicable, and attach Form 8833.

Specified individual filing as a
resident alien at the end of his or her
tax year. You are not required to
report specified foreign financial assets
on Form 8938 for the part of your tax
year reflected on the schedule to Form
1040 or the schedule to Form 1040EZ,
as applicable, required by Regulations
section 1.6012-1(b)(ii)(a), provided you
comply with the filing requirements of
Regulations section 1.6012-1(b)(2)(ii)
(a), including the requirement to timely
file Form 1040 or Form 1040EZ and
attach a properly completed Form 8833.

family of an individual includes the
spouses of the specified individual’s
family members.
Passive income. Passive income
means the part of gross income that
consists of:
• Dividends, including substitute
dividends;
• Interest;
• Income equivalent to interest,
including substitute interest;
• Rents and royalties, other than rents
and royalties derived in the active
conduct of a trade or business
conducted, at least in part, by
employees of the corporation or
partnership;
• Annuities;
• The excess of gains over losses from
the sale or exchange of property
described in Regulations section
1.6038D-6(b)(3)(i)(F) and that gives rise
to the types of passive income listed
above;
• The excess of gains over losses from
transactions (including futures,
forwards, and similar transactions) in
any commodity, but not including,
1. Any commodity hedging
transaction described in section 954(c)
(5)(A), or
2. Active business gains or losses
from the sale of commodities, but only if
substantially all the corporation’s or
partnership’s commodities are property
described in paragraph (1), (2), or (8) of
section 1221(a);
• The excess of foreign currency gains
over foreign currency losses (as defined
in section 988(b)) attributable to any
section 988 transaction; and
• Net income from notional principal
contracts.

(2)), any income from any transaction
entered into in the ordinary course of the
corporation’s or partnership’s trade or
business as a dealer in securities.
Passive income or assets of related
corporations and partnerships. For
purposes of determining whether a
domestic corporation or partnership
meets the passive income or asset test,
domestic corporations and domestic
partnerships that are closely held by the
same specified individual and that are
connected through stock or partnership
ownership with a common parent
corporation or partnership are treated as
owning the combined assets and
receiving the combined income of all
members of that group. For this
purpose, any contract, equity, or debt
existing between members of the group,
as well as any items of gross income
arising from that contract, equity, or debt
is eliminated.

DRAFT AS OF
October 18, 2018

Specified Domestic Entity

You are a specified domestic entity if
you are one of the following.
• A closely held domestic corporation
that has at least 50% of its gross income
from passive income.
• A closely held domestic corporation if
at least 50% of its assets produce or are
held for the production of passive
income (see Passive income and
Percentage of passive assets held by a
corporation or partnership, later).
• A closely held domestic partnership
that has at least 50% of its gross income
from passive income.
• A closely held domestic partnership if
at least 50% of its assets produce or are
held for the production of passive
income (see Passive income, and
Percentage of passive assets held by a
corporation or partnership, later).
• A domestic trust described in section
7701(a)(30)(E) that has one or more
specified persons (a specified individual
or a specified domestic entity) as a
current beneficiary.

Closely held domestic corporation.
A domestic corporation is closely held if,
on the last day of the corporation’s tax
year, a specified individual directly,
indirectly, or constructively owns at least
80% of the total combined voting power
of all classes of stock of the corporation
entitled to vote or at least 80% of the
total value of the stock of the
corporation.
Closely held domestic partnership.
A domestic partnership is closely held if,
on the last day of the partnership’s tax
year, a specified individual directly,
indirectly, or constructively holds at
least 80% of the capital or profits
interest in the partnership.
Constructive ownership. Sections
267(c) and (e)(3) apply for purposes of
determining a specified individual’s
constructive ownership in a domestic
corporation or partnership, except that
section 267(c)(4) is applied as if the

Exception from passive income
treatment for dealers. In the case of a
domestic corporation or partnership
regularly acting as a dealer in property
described in Regulations section
1.6038D-6(b)(3)(i)(F), forward
contracts, options contracts, or similar
financial instruments (including notional
principal contracts and all instruments
referenced to commodities), passive
income does not include the following:
1. Any item of income or gain (other
than any dividends or interest) from any
transaction (including hedging
transactions and transactions involving
physical settlement) entered into in the
ordinary course of such dealer’s trade or
business as such a dealer.
2. In the case of a corporation or
partnership that is a dealer in securities
(within the meaning of section 475(c)
-2-

Connected stock or partnership
ownership. A domestic corporation or
partnership is considered connected
through stock or partnership interest
ownership with a common parent
corporation or partnership in the
following circumstances.
1. Stock representing at least 80%
of the total combined voting power of all
classes of stock of the corporation
entitled to vote or of the value of such
corporation, other than stock of the
common parent, is owned by one or
more of the other connected
corporations, connected partnerships,
or the common parent.
2. Partnership interests
representing at least 80% of the profits
interests or capital interests of the
partnership, other than partnership
interests in the common parent, is
owned by one or more of the other
connected corporations, connected
partnerships, or the common parent.
Percentage of passive assets held
by a corporation or partnership. For
purposes of determining whether at
least 50% of your assets produce or are
held for the production of passive
income, the percentage of passive
assets held by the corporation or
partnership for a tax year is the
weighted average percentage of
passive assets (weighted by total assets
and measured quarterly). The value of
assets of the corporation or partnership
is the fair market value or the book
value. The book value of assets is the
amount reflected on the corporation’s or
partnership’s balance sheet and may be
determined under either a U.S. or an
Instructions for Form 8938 (2018)

international financial accounting
standard. See the example below,
which illustrates the application of this
weighted average asset rule.

exempt from tax under section 664(c), is
not a specified domestic entity.

Domestic trusts. A trust described in
section 7701(a)(30)(E) is considered a
specified domestic entity if and only if
the trust has one or more specified
persons (a specified individual or a
specified domestic entity) as a current
beneficiary for the tax year.

Certain domestic trusts. A trust
described in section 7701(a)(30)(E) is
not considered a specified domestic
entity, provided that:
1. The trustee is one of the
following.
• A bank that is examined by the Office
of the Comptroller of the Currency, the
Board of Governors of the Federal
Reserve System, the Federal Deposit
Insurance Corporation, or the National
Credit Union Administration.
• A financial institution that is registered
with and regulated or examined by the
Securities and Exchange Commission.
• A domestic corporation described in
section 1473(3)(A) or (B), and the
regulations issued with respect to those
provisions;
2. The trustee has supervisory
authority over or fiduciary obligations
with regard to the specified foreign
financial assets held by the trust; and
3. The trustee files annual returns
and information returns by the due date
(including any applicable extensions) on
behalf of the trust.

Reporting Thresholds Applying to
Specified Individuals
If you are a specified individual, your
applicable reporting threshold depends
upon whether you are married, file a
joint federal income tax return, and live
inside (or outside) the United States.

DRAFT AS OF
October 18, 2018

Current beneficiary. With respect
to a tax year, a current beneficiary is any
person who at any time during the tax
year is entitled to, or at the discretion of
any person may receive, a distribution
from the principal or income of the trust
(determined without regard to any
power of appointment to the extent that
such power remains unexercised at the
end of the tax year).
Special rule for general powers of
appointment. A current beneficiary
also includes any holder of a general
power of appointment, whether or not
exercised, that was exercisable at any
time during the tax year. A holder of a
general power of appointment that is
exercisable only on the death of the
holder is not a current beneficiary.

Excepted Specified Domestic
Entities
Entities described in section
1473(3). An entity described in section
1473(3) and the regulations thereunder,
with the exception of a trust that is

Domestic trusts owned by one or
more specified persons. A trust
described in section 7701(a)(30)(E) to
the extent the trust or any part of the
trust is treated as owned by one or more
specified persons under sections 671
through 678 and the regulations.

Reporting Thresholds

Example.
The following example illustrates the application of the weighted average asset rule.
DC is a domestic corporation, the total value of the stock of which is owned by L, a specified
individual. DC is a calendar year taxpayer. Less than 50% of DC’s gross income for its tax year
beginning January 1, 2018, is passive income. DC has the following assets in 2018, measured
quarterly:

Passive Assets

Total Assets

Q1

$150

$200

Q2

$150

$300

Q3

$300

$500

Q4

$200

$1000

Taxable Year Totals

$800

$2,000

DC’s weighted passive asset percentage for tax year 2018 is 40%, that is, DC’s total passive assets
divided by its total assets ($800 / $2,000 = 40%). Because fewer than 50% of DC’s assets produce or
are held for the production of passive income and less than 50% of DC’s gross income for its tax year
is passive income, DC does not meet the passive asset or passive income threshold and would not
be a specified domestic entity.

Instructions for Form 8938 (2018)

-3-

Taxpayers living in the United
States. If you do not live outside the
United States, you satisfy the reporting
threshold discussed next that applies to
you, and no exception applies, file Form
8938 with your income tax return.
Unmarried taxpayers. If you are
not married, you satisfy the reporting
threshold only if the total value of your
specified foreign financial assets is
more than $50,000 on the last day of the
tax year or more than $75,000 at any
time during the tax year.
Married taxpayers filing a joint
income tax return. If you are married
and you and your spouse file a joint
income tax return, you satisfy the
reporting threshold only if the total value
of your specified foreign financial assets
is more than $100,000 on the last day of
the tax year or more than $150,000 at
any time during the tax year.
Married taxpayers filing separate
income tax returns. If you are married
and file a separate income tax return
from your spouse, you satisfy the
reporting threshold only if the total value
of your specified foreign financial assets
is more than $50,000 on the last day of
the tax year or more than $75,000 at
any time during the tax year.
Taxpayers living outside the United
States. If your tax home is in a foreign
country, you meet one of the presence
abroad tests described next, and no
exception applies, file Form 8938 with
your income tax return if you satisfy the
reporting threshold discussed next that
applies to you.
Unmarried taxpayers. If you are
not married, you satisfy the reporting
threshold only if the total value of your
specified foreign financial assets is
more than $200,000 on the last day of
the tax year or more than $300,000 at
any time during the tax year.
Married taxpayers filing a joint
income tax return. If you are married
and you and your spouse file a joint
income tax return, you satisfy the
reporting threshold only if the total value
of your specified foreign financial assets
is more than $400,000 on the last day of
the tax year or more than $600,000 at
any time during the tax year.

Married taxpayers filing separate
income tax returns. If you are married
and file a separate income tax return
from your spouse, you satisfy the
reporting threshold only if the total value
of your specified foreign financial assets
is more than $200,000 on the last day of
the tax year or more than $300,000 at
any time during the tax year.

Value of an interest in a foreign trust
during the tax year. If you do not
know or have reason to know based on
readily accessible information the fair
market value of your interest in a foreign
trust during the tax year, the value to be
included in determining the total value of
your specified foreign financial assets
during the tax year is the maximum
value of your interest in the foreign trust.
See Valuing interests in foreign trusts in
Reporting Maximum Value, later, for
rules on determining the maximum
value of an interest in a foreign trust.

your spouse to determine the total value
of all of your specified foreign financial
assets.
Joint ownership with a spouse
who is not a specified individual or
someone other than a spouse. Each
joint owner includes the entire value of
the jointly owned asset to determine the
total value of all of that joint owner's
specified foreign financial assets.

DRAFT AS OF
October 18, 2018

Presence abroad. You satisfy the
presence abroad test if you are one of
the following.
• A U.S. citizen who has been a bona
fide resident of a foreign country or
countries for an uninterrupted period
that includes an entire tax year.
• A U.S. citizen or resident who is
present in a foreign country or countries
at least 330 full days during any period
of 12 consecutive months that ends in
the tax year being reported.

Reporting Thresholds Applying to
Specified Domestic Entities
If you are a specified domestic entity,
you satisfy the reporting threshold only if
the total value of your specified foreign
financial assets is more than $50,000 on
the last day of the tax year or more than
$75,000 at any time during the tax year.

Determining the Total Value of
Your Specified Foreign Financial
Assets
You must figure the total value of the
specified foreign financial assets in
which you have an interest to determine
if you satisfy the reporting threshold that
applies to you. To determine if you have
an interest in a specified foreign
financial asset, see Interests in
Specified Foreign Financial Assets,
later.
Valuing specified foreign financial
assets. The value of a specified
foreign financial asset for purposes of
determining the total value of specified
foreign financial assets in which you
have an interest during the tax year or
on the last day of the tax year is the
asset's fair market value. For purposes
of figuring the total value of specified
foreign financial assets, the value of a
specified foreign financial asset
denominated in a foreign currency must
be first determined in the foreign
currency and then converted to U.S.
dollars. See Foreign currency
conversion in Reporting Maximum
Value, later, for rules on determining
and applying the appropriate foreign
currency exchange rate.

Value of an interest in a foreign estate, foreign pension plan, and foreign deferred compensation plan. If
you do not know or have reason to know
based on readily accessible information
the fair market value of your interest in a
foreign estate, foreign pension plan, or
foreign deferred compensation plan
during the tax year, the value to be
included in determining the total value of
your specified foreign financial assets
during the tax year is the fair market
value, determined as of the last day of
the tax year, of the currency and other
property distributed during the tax year
to you. If you received no distributions
during the tax year and do not know or
have reason to know based on readily
accessible information the fair market
value of your interest, use a value of
zero for the interest.
Asset with no positive value. If the
maximum value of a specified foreign
financial asset is less than zero, use a
value of zero for the asset.
Joint interests. If you jointly own an
asset with someone else, the value that
you use to determine the total value of
all of your specified foreign financial
assets depends on whether the other
owner is your spouse and, if so, whether
your spouse is a specified individual
and whether you file a joint or separate
return.
Joint ownership with spouse
filing joint income tax return. If you
and your spouse file a joint income tax
return and, therefore, would file one
combined Form 8938 for the tax year,
include the value of the asset jointly
owned with your spouse only once to
determine the total value of all of the
specified foreign financial assets you
and your spouse own.
Joint ownership with spouse
filing separate income tax return. If
you and your spouse are specified
individuals and you each file a separate
annual return, include one-half of the
value of the asset jointly owned with
-4-

Special Rules

Assets reported on another form
Specified individual. If you are a
specified individual, include the value of
all specified foreign financial assets,
even if they are reported on another
form listed in Part IV to determine if you
satisfy the reporting threshold that
applies to you. See Part IV. Excepted
Specified Foreign Financial Assets,
later.
Specified domestic entity. If you
are a specified domestic entity, exclude
the value of any specified foreign
financial asset reported on another form
listed in Part IV, to determine if you
satisfy the applicable reporting
threshold.

Bona fide resident of a U.S. possession. Do not include the value of
specified foreign financial assets you
are not required to report because you
are a bona fide resident of a U.S.
possession. See Bona fide resident of a
U.S. possession, under Exceptions to
Reporting, later.
Owners of certain domestic trusts.
Do not include the value of specified
foreign financial assets you are not
required to report because you are an
owner of a domestic widely-held fixed
investment trust or a domestic
liquidating trust created under chapter 7
or chapter 11 of the Bankruptcy Code.
See Domestic investment trusts and
Domestic bankruptcy trusts, under
Exceptions to Reporting, later.
Related domestic corporations and
partnerships. To determine if you
satisfy the applicable reporting
threshold, a specified domestic entity
that is a corporation or partnership and
that has an interest in any specified
foreign financial asset is treated as
owning all specified foreign financial
assets held by all related corporations
or partnerships that are closely held by
the same specified individual (excluding
specified foreign financial assets that
are excluded from reporting under Part
IV of Form 8938 or because you are the
Instructions for Form 8938 (2018)

owner of a domestic widely-held fixed
investment trust or a domestic
liquidating trust created under chapter 7
or chapter 11 of the Bankruptcy Code).

Examples
These examples may help you decide if
you have to file Form 8938.

and jointly and individually own
specified foreign financial assets.
On the last day of the tax year, my
spouse and I jointly own a specified
foreign financial asset with a value
of $90,000. My spouse has a
separate interest in a specified
foreign financial asset with a value
of $10,000. I have a separate interest
in a specified foreign financial asset
with a value of $1,000. You and your
spouse have to file a combined Form
8938. You and your spouse have an
interest in specified foreign financial
assets in the amount of $101,000 on the
last day of the tax year. This is the entire
value of the specified foreign financial
asset that you jointly own, $90,000, plus
the value of the asset that your spouse
separately owns, $10,000, plus the
value of the asset that you separately
own, $1,000. You and your spouse
satisfy the reporting threshold of more
than $100,000 on the last day of the tax
year.

entire value of the asset that you
separately own, $1,000. Your spouse
satisfies the reporting threshold of more
than $50,000 on the last day of the tax
year. You do not satisfy the reporting
threshold of more than $50,000 on the
last day of the tax year or more than
$75,000 at any time during the tax year.

DRAFT AS OF
October 18, 2018

I am not married and do not live
abroad. The total value of my
specified foreign financial assets
does not exceed $49,000 during the
tax year. You do not have to file Form
8938. You do not satisfy the reporting
threshold of more than $50,000 on the
last day of the tax year or more than
$75,000 at any time during the tax year.

I am not married and do not live
abroad. I sold my only specified
foreign financial asset on October
15, when its value was $125,000.
You have to file Form 8938. You satisfy
the reporting threshold even though you
do not hold any specified foreign
financial assets on the last day of the
tax year because you did own specified
foreign financial assets of more than
$75,000 at any time during the tax year.

I am not married and do not live
abroad. I am an unrelated U.S.
resident and I jointly own a specified
foreign financial asset valued at
$60,000. You each have to file Form
8938. You each satisfy the reporting
threshold of more than $50,000 on the
last day of the tax year.
I am not married and do not live
abroad. I own an entity disregarded
for tax purposes, which owns one
specified foreign financial asset
valued at $30,000. In addition, I own
a specified foreign financial asset
valued at $25,000. You have to file
Form 8938. You own both the specified
foreign financial asset owned by the
disregarded entity and the specified
foreign financial asset you own directly,
for a total value of $55,000. You satisfy
the reporting threshold of more than
$50,000 on the last day of the tax year.
My spouse and I do not live
abroad and file a joint income tax
return. We jointly own a single
specified foreign financial asset
valued at $60,000. You and your
spouse do not have to file Form 8938.
You do not satisfy the reporting
threshold of more than $100,000 on the
last day of the tax year or more than
$150,000 at any time during the tax
year.
My spouse and I do not live
abroad, file a joint income tax return,
Instructions for Form 8938 (2018)

My spouse and I do not live
abroad, file separate income tax
returns, and jointly own a specified
foreign financial asset valued at
$60,000 for the entire year. Neither
you nor your spouse has to file Form
8938. You each use one-half of the
value of the asset, $30,000, to
determine the total value of specified
foreign financial assets that you each
own. Neither of you satisfies the
reporting threshold of more than
$50,000 on the last day of the tax year
or more than $75,000 at any time during
the tax year.
My spouse and I file separate
income tax returns, jointly and
individually own specified foreign
financial assets, and do not live
abroad. On the last day of the tax
year, my spouse and I jointly own a
specified foreign financial asset with
a value of $90,000. My spouse has a
separate interest in a specified
foreign financial asset with a value
of $10,000. I have a separate interest
in a specified foreign financial asset
with a value of $1,000. You do not
have to file Form 8938 but your spouse
does. Your spouse has an interest in
specified foreign financial assets in the
amount of $55,000 on the last day of the
tax year. This is one-half of the value of
the asset that you jointly own, $45,000,
plus the entire value of the asset that
your spouse separately owns, $10,000.
You have an interest in specified foreign
financial assets in the amount of
$46,000 on the last day of the tax year.
This is one-half of the value of the asset
that you jointly own, $45,000, plus the
-5-

My spouse and I are U.S. citizens
but live abroad for the entire tax
year and file a joint income tax
return. The total value of our
combined specified foreign financial
assets on any day of the tax year is
$150,000. You and your spouse do not
have to file Form 8938. You do not
satisfy the reporting threshold of more
than $400,000 on the last day of the tax
year or more than $600,000 at any time
during the tax year for married
individuals who live abroad and file a
joint income tax return.
My spouse and I live abroad and
file separate income tax returns. My
spouse is not a specified individual.
On the last day of the tax year, my
spouse and I jointly own a specified
foreign financial asset with a value
of $150,000. My spouse has a
separate interest in a specified
foreign financial asset with a value
of $10,000. I have a separate interest
in a specified foreign financial asset
with a value of $60,000. You have to
file Form 8938 but your spouse, who is
not a specified individual, does not. You
have an interest in specified foreign
financial assets in the amount of
$210,000 on the last day of the tax year.
This is the entire value of the asset that
you jointly own, $150,000, plus the
entire value of the asset that you
separately own, $60,000. You satisfy
the reporting threshold for a married
individual living abroad and filing a
separate return of more than $200,000
on the last day of the tax year.

Specified Foreign Financial Assets
Specified foreign financial assets
include the following assets.
1. Financial accounts maintained by
a foreign financial institution.
2. The following foreign financial
assets if they are held for investment
and not held in an account maintained
by a financial institution:
a. Stock or securities issued by
someone that is not a U.S. person
(including stock or securities issued by
a person organized under the laws of a
U.S. possession),
b. Any interest in a foreign entity,
and

c. Any financial instrument or
contract that has an issuer or
counterparty that is not a U.S. person
(including a financial contract issued by,
or with a counterparty that is, a person
organized under the laws of a U.S.
possession).
For foreign financial assets excepted
from reporting, see Assets Not Required
To Be Reported, later.

• A capital or profits interest in a foreign
partnership.
• A note, bond, debenture, or other
form of indebtedness issued by a
foreign person.
• An interest in a foreign trust or foreign
estate.
• An interest rate swap, currency swap,
basis swap, interest rate cap, interest
rate floor, commodity swap, equity
swap, equity index swap, credit default
swap, or similar agreement with a
foreign counterparty.
• An option or other derivative
instrument with respect to any of these
examples or with respect to any
currency or commodity that is entered
into with a foreign counterparty or
issuer.

are included or reflected on your income
tax return for this tax year.
Interests in property transferred in
connection with the performance of
services. You are first considered to
have an interest in property transferred
in connection with the performance of
services on the first date that the
property is substantially vested (within
the meaning of Regulations section
1.83-3(b)) or, if you have made a valid
section 83(b) election with respect to
the property, on the date of transfer of
the property.

DRAFT AS OF
October 18, 2018

Foreign social security. An interest
in a social security, social insurance, or
other similar program of a foreign
government is not a specified foreign
financial asset.

Financial account. A financial account
is any depository or custodial account
(under Regulations section 1.1471-5(b)
(1)(i) or (ii)) maintained by a foreign
financial institution as well as any equity
or debt interest in a foreign financial
institution (other than interests that are
regularly traded on an established
securities market) or any cash value life
insurance or annuity contract
maintained by an insurance company or
other foreign financial institution. A
specified foreign financial asset
includes a financial account maintained
by a financial institution that is
organized under the laws of a U.S.
possession (American Samoa, Guam,
the Northern Mariana Islands, Puerto
Rico, or the U.S. Virgin Islands).
Foreign financial institution. In
most cases, a foreign financial
institution is any financial institution that
is not a U.S. entity and satisfies one or
more of the following.
• It accepts deposits in the ordinary
course of a banking or similar business.
• It holds financial assets for the
account of others as a substantial part
of its business.
• It is engaged (or holds itself out as
being engaged) primarily in the
business of investing, reinvesting, or
trading in securities, partnership
interests, commodities, or any interest
(including a futures or forward contract
or option) in such securities, partnership
interests, or commodities.
A foreign financial institution includes
investment vehicles such as foreign
mutual funds, foreign hedge funds, and
foreign private equity funds.

Other specified foreign financial assets. Examples of other specified
foreign financial assets include the
following, if they are held for investment
and not held in a financial account.
• Stock issued by a foreign corporation.

Assets held for investment. You hold
an asset, including a partnership
interest, for investment if you do not use
it in, or hold it for use in, the conduct of
any trade or business.
Stock is not considered used or held
for use in the conduct of a trade or
business.
For tax years beginning on or
after December 12, 2014, if you
CAUTION are required to file Form 8938,
in addition to reporting retirement and
pension accounts and non-retirement
savings accounts described in
Regulations section 1.1471-5(b)(2)(i),
you must report retirement and pension
accounts, non-retirement savings
accounts, and accounts satisfying
conditions similar to those described in
Regulations section 1.1471-5(b)(2)(i)
that are otherwise excluded from the
definition of a financial account by an
applicable Model 1 IGA or Model 2 IGA.
Thus, such accounts are subject to
uniform reporting rules and must be
reported without regard to whether the
account is maintained in a jurisdiction
with an IGA.

!

Interests in Specified Foreign
Financial Assets
You have an interest in a specified
foreign financial asset if any income,
gains, losses, deductions, credits, gross
proceeds, or distributions from holding
or disposing of the asset are or would
be required to be reported, included, or
otherwise reflected on your income tax
return.
You have an interest in a specified
foreign financial asset even if no
income, gains, losses, deductions,
credits, gross proceeds, or distributions
from holding or disposing of the asset
-6-

Interests in assets held by disregarded entities. If you are the owner of a
disregarded entity, you have an interest
in any specified foreign financial assets
owned by the disregarded entity.
Interests in jointly owned assets. A
joint owner of an asset has an interest in
the entire asset. For special rules for
interests in assets jointly owned by
spouses, see Joint interests in
Determining the Total Value of Your
Specified Foreign Financial Assets,
earlier, and Reporting the value of jointly
owned assets in Reporting Maximum
Value, later.
Interests in assets held in financial
accounts. If you have an interest in a
financial account that holds specified
foreign financial assets, you do not have
to report the assets held in the account.
Interests in assets generating certain unearned income of children. If
you file Form 8814, Parents' Election To
Report Child's Interest and Dividends,
with your income tax return to elect to
include in your gross income certain
unearned income of your child (the
“kiddie tax” election), you have an
interest in any specified foreign financial
asset held by the child.
Interests in assets held by entities
that are not disregarded entities. In
most cases, you do not own an interest
in any specified foreign financial asset
held by a partnership, corporation, trust,
or estate solely as a result of your status
as a partner, shareholder, or
beneficiary.
Interests in assets held by grantor
trust. If you are considered the owner
under the grantor trust rules of any part
of a trust, you have an interest in any
specified foreign financial asset held by
that part of the trust you are considered
to own. For exceptions from reporting
for owners of certain domestic
investment or bankruptcy trusts, see
Domestic investment trusts and

Instructions for Form 8938 (2018)

Domestic bankruptcy trusts in
Exceptions to Reporting, later.

and Valuing other specified foreign
financial assets, later.

Interests in foreign estates and foreign trusts. An interest in a foreign
trust or a foreign estate is not a
specified foreign financial asset unless
you know or have reason to know based
on readily accessible information of the
interest. If you receive a distribution
from the foreign trust or foreign estate,
you are considered to know of the
interest.

Assets with no positive value. If the
maximum value of a specified foreign
financial asset is less than zero, use a
value of zero as the maximum value of
the asset.

maximum value of the entire asset. If
you and your spouse file a joint income
tax return that includes Form 8814, you
must report any specified foreign
financial asset your child owns only
once and include the maximum value of
the entire asset.
Married specified individuals
filing separate income tax returns. If
you are married and you and your
spouse are specified individuals who file
separate income tax returns, both you
and your spouse report any specified
foreign financial asset that you jointly
own on your separate Forms 8938, and
both you and your spouse must include
the maximum value of the entire asset
on your separate Forms 8938. You also
must report any specified foreign
financial asset that you own individually
on your separate Form 8938 and
include the maximum value of the entire
asset. If you file Form 8814, you must
report any specified foreign financial
asset your child owns and include the
maximum value of the entire asset.

DRAFT AS OF
October 18, 2018

Interests in foreign pension plans
and foreign deferred compensation
plans. Report in Part VI your interest in
the foreign pension plan or foreign
deferred compensation plan. Do not
separately report the assets held by the
plan. See Valuing interests in foreign
estates, foreign pension plans, and
deferred compensation plans in
Reporting Maximum Value, later.

Reporting Period
Unless an exception applies, the
reporting period for Form 8938 is your
tax year.
Exception for partial tax years of
specified individuals. If you are a
specified individual for less than the
entire tax year, the reporting period is
the part of the year that you are a
specified individual.
Example 1. John is a calendar year
taxpayer. The Form 8938 reporting
period begins on January 1 and ends on
December 31.
Example 2. Agnes was a single
calendar year taxpayer who died on
March 6. The Form 8938 reporting
period begins on January 1 and ends on
March 6.
Example 3. George, a calendar year
taxpayer, is not a U.S. citizen or
married. George arrived in the United
States on February 1 and satisfied the
substantial presence test for the tax
year. The Form 8938 reporting period
begins on George's U.S. residency
starting date, February 1, and ends on
December 31.

Reporting Maximum Value
You must report the maximum value
during the tax year of each specified
foreign financial asset reported on Form
8938. In most cases, the value of a
specified foreign financial asset is its fair
market value. An appraisal by a third
party is not necessary to estimate the
maximum fair market value during the
year. See Valuing financial accounts
Instructions for Form 8938 (2018)

Foreign currency conversion. If your
specified foreign financial asset is
denominated in a foreign currency
during the tax year, the maximum value
of the asset must be determined in the
foreign currency and then converted to
U.S. dollars.
In most cases, you must use the U.S.
Treasury Bureau of the Fiscal Service
foreign currency exchange rate for
purchasing U.S. dollars. You can find
this rate on www.fiscal.treasury.gov/
fsreports/rpt/treasRptRateExch/
treasRptRateExch_home.htm. If no U.S.
Treasury Bureau of the Fiscal Service
exchange rate is available, you must
use another publicly available foreign
currency exchange rate for purchasing
U.S. dollars and disclose the rate on
Form 8938.
Currency determination date. Use
the currency exchange rate on the last
day of the tax year to figure the
maximum value of a specified foreign
financial asset or the value of a
specified foreign financial asset for the
purpose of determining the total value of
your specified foreign financial assets to
see whether you have met the reporting
threshold. Use this rate even if you sold
or otherwise disposed of the specified
foreign financial asset before the last
day of the tax year.
Exception for financial account
statement currency conversion rate.
You may rely on the foreign currency
conversion rate reflected in a financial
account statement issued at least
annually by the financial institution
maintaining the account.
Reporting the value of jointly owned
assets. If you own an asset jointly with
one or more persons, you must report
the asset's maximum value as follows.
Married specified individuals
filing a joint income tax return. If you
are married and you and your spouse
file a joint income tax return, report any
specified foreign financial asset that you
jointly own only once and include the
maximum value of the entire asset (and
not just the maximum value of your
interest in the asset). Also, you must
report any specified foreign financial
asset that you or your spouse
separately owns and include the
-7-

Other joint ownership. If you are a
joint owner of a specified foreign
financial asset and you cannot use one
of the special rules for married
individuals who file a joint tax return, you
must report the specified foreign
financial asset and include the
maximum value of the entire asset.
Valuing financial accounts. You may
rely on periodic account statements for
the tax year to report a financial
account's maximum value unless you
know or have reason to know based on
readily accessible information that the
statements do not reflect a reasonable
estimate of the maximum account value
during the tax year.
Valuing other specified foreign financial assets. In most cases, you
may use the value of a specified foreign
financial asset that is not a financial
account and that is held for investment
and not held in an account maintained
by a financial institution as of the last
day of the tax year, unless you know or
have reason to know based on readily
accessible information that the value
does not reflect a reasonable estimate
of the maximum value of the asset
during the tax year.
Example. I have publicly traded
foreign stock not held in a financial
account that has a fair market value
as of the last day of the tax year of
$100,000, although, based on daily
price information that is readily
available, the 52-week high trading
price for the stock results in a

maximum value of the stock during
the tax year of $150,000. If you are
required to file Form 8938, the
maximum value of the foreign stock to
be reported is $150,000, based on
readily available information of the
stock’s maximum value during the tax
year.

branch or foreign subsidiary of a U.S.
financial institution.
Examples of financial accounts
maintained by U.S. financial institutions
include:
• U.S. mutual funds accounts;
• IRAs (traditional or Roth);
• Section 401(k) retirement accounts;
• Qualified U.S. retirement plans; and
• Brokerage accounts maintained by
U.S. financial institutions.
2. A financial account that is
maintained by a dealer or trader in
securities or commodities if all of the
holdings in the account are subject to
the mark-to-market accounting rules for
dealers in securities or an election
under section 475(e) or (f) is made for
all of the holdings in the account.

Specified Foreign Financial Assets,
later.
Foreign grantor trusts. If you are
considered the owner under the grantor
trust rules of any part of a foreign trust,
you do not have to report any of the
specified foreign financial assets held
by the part of the trust you are
considered to own if you satisfy the
following conditions.
• You report the trust on a Form 3520
that you timely file with the IRS for the
same tax year.
• The trust timely files Form 3520-A,
Annual Information Return of Foreign
Trust With a U.S. Owner, with the IRS
for the same tax year.
Instead, you must identify on Form
8938 how many of these forms you file.
See Part IV. Excepted Specified Foreign
Financial Assets, later.

DRAFT AS OF
October 18, 2018

Valuing interests in foreign trusts. If
you are a beneficiary of a foreign trust,
the maximum value of your interest in
the trust is the sum of the following
amounts.
• The value of all of the cash or other
property distributed during the tax year
from the trust to you as a beneficiary.
• The value using the valuation tables
under section 7520 of your right as a
beneficiary to receive mandatory
distributions as of the last day of the tax
year.

Valuing interests in foreign estates,
foreign pension plans, and foreign
deferred compensation plans. If you
have an interest in a foreign estate,
foreign pension plan, or foreign deferred
compensation plan, the maximum value
of your interest is the fair market value
of your beneficial interest in the assets
of the estate, pension plan, or deferred
compensation plan as of the last day of
the tax year. If you do not know or have
reason to know based on readily
accessible information the fair market
value as of the last day of the tax year,
the maximum value is the fair market
value, determined as of the last day of
the tax year, of the cash and other
property distributed during the tax year
to you as a beneficiary or participant. If
you received no distributions during the
tax year and do not know or have
reason to know based on readily
accessible information the fair market
value of your interest as of the last day
of the tax year, use a value of zero as
the maximum value of the asset.

Assets Not Required To Be
Reported
You are not required to report the
following assets.
Certain financial accounts. The
following financial accounts and the
assets held in such accounts are not
specified foreign financial assets and do
not have to be reported on Form 8938.
1. A financial account that is
maintained by a U.S. payer, such as a
domestic financial institution. In general,
a U.S. payer also includes a domestic
branch of a foreign bank or foreign
insurance company and a foreign

Certain financial assets. You do not
have to report any asset that is not held
in a financial account if the asset is
subject to the mark-to-market
accounting rules for dealers in securities
or commodities or an election under
section 475(e) or (f) is made for the
asset.

Exceptions to Reporting
Duplicative reporting. You do not
have to report any asset on Form 8938 if
you report it on one or more of the
following forms that you timely file with
the IRS for the same tax year.
• Form 3520, Annual Return To Report
Transactions With Foreign Trusts and
Receipt of Certain Foreign Gifts.
• Form 5471, Information Return of
U.S. Persons With Respect To Certain
Foreign Corporations.
• Form 8621, Information Return by a
Shareholder of a Passive Foreign
Investment Company or Qualified
Electing Fund.
• Form 8865, Return of U.S. Persons
With Respect to Certain Foreign
Partnerships.
Instead, you must identify on Form
8938 the form(s) on which you report
the specified foreign financial asset and
how many of these forms you file. See
Part IV. Excepted Specified Foreign
Financial Assets, later.
Joint Form 5471 or Form 8865 filers.
If you are included as part of a joint
Form 5471 or Form 8865 filing and
provide the notification required by
Regulations section 1.6038-2(i) or
Regulations section 1.6038-3(c), you
are considered to have filed that form
for purposes of the requirement to
report specified foreign financial assets
on Form 8938. See Part IV. Excepted
-8-

If you are a specified individual,
you must include the value of
CAUTION the assets reported on Forms
3520, 3520-A, 5471, 8621, and 8865 in
determining whether you satisfy the
reporting threshold that applies to you.
See Reporting Thresholds, earlier.

!

Domestic investment trusts. If you
are considered the owner under the
grantor trust rules of any part of a
domestic widely held fixed investment
trust under Regulations section 1.671-5,
you do not have to report any specified
foreign financial asset held by the part of
the trust you are considered to own.
Domestic bankruptcy trusts. If you
are considered the owner under the
grantor trust rules of any part of a
domestic liquidating trust under
Regulations section 301.7701-4(d) that
is created under chapter 7 or chapter 11
of the Bankruptcy Code, you do not
have to report any specified foreign
financial asset held by the part of the
trust you are considered to own.
Bona fide resident of a U.S. possession. If you are a bona fide resident of
a U.S. possession (American Samoa,
Guam, the Northern Mariana Islands,
Puerto Rico, or the U.S. Virgin Islands),
do not include the value of the following
assets to determine if you satisfy the
reporting threshold that applies to you. If
you are required to file Form 8938, you
do not have to report the following
specified foreign financial assets on
Form 8938.
• A financial account maintained by a
financial institution organized under the
laws of the U.S. possession of which
you are a bona fide resident.

Instructions for Form 8938 (2018)

• A financial account maintained by a
branch of a financial institution not
organized under the laws of the U.S.
possession of which you are a bona fide
resident, if the branch is subject to the
same tax and information reporting
requirements that apply to a financial
institution organized under the laws of
the U.S. possession of which you are a
bona fide resident.
• Stock or securities issued by an entity
organized under the laws of the U.S.
possession of which you are a bona fide
resident.
• An interest in an entity organized
under the laws of the U.S. possession of
which you are a bona fide resident.
• A financial instrument or contract held
for investment, provided each issuer or
counterparty that is not a U.S. person is
either an entity organized under the
laws of the U.S. possession of which
you are a bona fide resident or a bona
fide resident of the U.S. possession of
which you are a bona fide resident.

asset, but you do not provide enough
information for the IRS to determine the
value of the asset, you are presumed to
own specified foreign financial assets
with a value of more than the reporting
threshold that applies to you. See
Determining the Total Value of Your
Specified Foreign Financial Assets,
earlier. In such case you are subject to
the failure-to-file penalties if you do not
file Form 8938.

Fraud
If you underpay your tax due to fraud,
you must pay a penalty of 75% of the
underpayment due to fraud.

Criminal Penalties
In addition to the penalties already
discussed, if you fail to file Form 8938,
fail to report an asset, or have an
underpayment of tax, you may be
subject to criminal penalties.

DRAFT AS OF
October 18, 2018

Penalties

You may be subject to penalties if you
fail to timely file a correct Form 8938 or
if you have an understatement of tax
relating to an undisclosed specified
foreign financial asset.

Failure-To-File Penalty
If you are required to file Form 8938 but
do not file a complete and correct Form
8938 by the due date (including
extensions), you may be subject to a
penalty of $10,000.
Continuing failure to file. If you do
not file a correct and complete Form
8938 within 90 days after the IRS mails
you a notice of the failure to file, you
may be subject to an additional penalty
of $10,000 for each 30-day period (or
part of a period) during which you
continue to fail to file Form 8938 after
the 90-day period has expired. The
maximum additional penalty for a
continuing failure to file Form 8938 is
$50,000.
Married taxpayers filing a joint income tax return. If you are married
and you and your spouse file a joint
income tax return, the failure to file
penalties apply as if you and your
spouse were a single person. You and
your spouse’s liability for all penalties is
joint and several.
Presumption of maximum value. If
the IRS determines that you have an
interest in one or more specified foreign
financial assets and asks you for
information about the value of any
Instructions for Form 8938 (2018)

Reasonable cause exception. No
penalty will be imposed if you fail to file
Form 8938 or to disclose one or more
specified foreign financial assets on
Form 8938 and the failure is due to
reasonable cause and not to willful
neglect. You must affirmatively show the
facts that support a reasonable cause
claim.
The determination of whether a
failure to disclose a specified foreign
financial asset on Form 8938 was due to
reasonable cause and not due to willful
neglect will be determined on a
case-by-case basis, taking into account
all pertinent facts and circumstances.
Effect of foreign jurisdiction laws.
The fact that a foreign jurisdiction would
impose a civil or criminal penalty on you
if you disclose the required information
is not reasonable cause.

Accuracy-Related Penalty
If you underpay your tax as a result of a
transaction involving an undisclosed
specified foreign financial asset, you
may have to pay a penalty equal to 40%
of that underpayment.
Examples. Examples of
underpayments due to transactions
involving an undisclosed specified
foreign financial asset include the
following.
• You do not report ownership of
shares in a foreign corporation on Form
8938 and you received taxable
distributions from the company that you
did not report on your income tax return.
• You do not report ownership of
shares in a foreign company on Form
8938 and you sold the shares in the
company for a gain and did not report
the gain on your income tax return.
• You do not report a forieign pension
on Form 8938 and you received a
taxable distribution from the pension
plan that you did not report on your
income tax return.

-9-

Statute of Limitations

If you fail to file Form 8938 or fail to
report a specified foreign financial asset
that you are required to report, the
statute of limitations for the tax year may
remain open for all or a part of your
income tax return until 3 years after the
date on which you file Form 8938.
Extended statute of limitations for
failure to include income. If you do
not include in your gross income an
amount relating to one or more specified
foreign financial assets, and the amount
you omit is more than $5,000, any tax
you owe for the tax year can be
assessed at any time within 6 years
after you filed your return.
For this purpose, specified foreign
financial assets include any specified
foreign financial assets in which you
have an interest without regard to the
reporting threshold that applies to you
and regardless of any exception from
reporting a specified foreign financial
asset on Form 8938.

Specific Instructions
Before you begin. If you are a
specified individual and report all of your
specified foreign financial assets on
timely filed Forms 3520, 3520-A, 5471,
8621, or 8865, you do not have to report
them on Form 8938. Instead, enter your
name(s) and taxpayer identification
number (TIN) at the top of the form and
complete Part IV only. If you are a
specified individual or a specified
domestic entity and report only a part of
your specified foreign financial assets
on one or more of these forms, report
the remaining assets on Form 8938 and
complete Part IV.
Additional sheets. If you have more
than one account or asset to report in
Part V or VI, or more than one issuer or
counterparty to report in Part VI, use the
continuation statement provided after
page 2. Copy as many continuation
statements as you need, and attach the
completed statements to Form 8938

following page 2. Check the box at the
top of page 1 of the form to indicate that
you are attaching continuation
statements, and enter the number of
continuation statements in the space
provided.

Tax Year

Part I. Foreign Deposit and
Custodial Accounts Summary

Use Part I to summarize information
regarding foreign deposit and custodial
accounts reported in all Parts V.
Line 1. Report the number of
deposit accounts reported in all Parts V.

However, you must identify the form
where you reported the asset by
indicating how many forms you filed.
For more information, see Duplicative
reporting, earlier. If you reported a
specified foreign financial asset on one
or more of the following forms, enter the
number of forms filed.
• Form 3520.
• Form 3520-A.
• Form 5471.
• Form 8621.
• Form 8865.

DRAFT AS OF
October 18, 2018

Enter, in the space provided below the
title of Form 8938, the tax year of the
specified individual or specified
domestic entity for whom you are
furnishing information.

Identifying Information

Lines 1 and 2. Enter your name(s) and
taxpayer identification number (TIN) as
shown on the annual return you are
filing with Form 8938. If you are a
specified individual (see Specified
Individual, earlier), enter the first TIN
shown on your income tax return. A TIN
is a social security number (SSN) or
individual taxpayer identification number
(ITIN). In the case of a specified
domestic entity (see Specified Domestic
Entity, earlier), enter the entity’s
employer identification number (EIN).
Line 3. Indicate the type of filer by
checking the applicable box on line 3. If
you are a specified individual (see
Specified Individual, earlier), check
box 3a. In the case of a specified
domestic entity (see Specified Domestic
Entity, earlier), check the applicable box
for partnership (3b), corporation (3c), or
trust (3d).
Line 4. If you checked box 3a
(specified individual), do not complete
this line 4. If you checked box 3b
(partnership) or 3c (corporation), enter
the name and TIN of the specified
individual (see Specified Individual,
earlier) who closely holds the
partnership or corporation. If you
checked box 3d (trust), enter the name
and TIN of the specified person (see
Specified Person, earlier) who is a
current beneficiary of the trust.
Note. If you are a paper filer and you
have more than one specified individual
or specified person, attach a statement
listing the name and TIN of each such
specified individual or specified person.
If you are a specified individual

TIP (see Specified Individual,

earlier) for less than the entire
tax year, you only have to report the
information for the part of the year that
you are a specified individual.

Line 2. Report the total maximum
value of these deposit accounts.

Line 3. Report the number of
custodial accounts reported in all Parts
V.
Line 4. Report the total maximum
value of these custodial accounts.

Line 5. Indicate whether any foreign
deposit or custodial accounts were
closed during the tax year.

Part II. Other Foreign Assets
Summary

Use Part II to summarize information
regarding financial accounts (other than
foreign deposit and custodial accounts)
and other specified foreign financial
assets reported in all Parts VI.
Line 1. Report the number of
accounts and assets reported in all
Parts VI.
Line 2. Report the total maximum
value of these accounts and assets.
Line 3. Indicate whether any
account was opened or closed or any
asset was acquired or disposed of
during the tax year.

Part III. Summary of Tax Items
Attributable to Specified
Foreign Financial Assets

Enter the following items for your total
assets reported in Part V or Part VI and
the schedule, form, or return on which
you reported the items.
• Interest.
• Dividends.
• Royalties.
• Income.
• Gains or (losses).
• Deductions.
• Credits.
If you did not report any tax item for a
specified foreign financial asset on any
form or schedule for the tax year, check
the box on line 3d of Part V or Part VI for
the account or asset.

Part IV. Excepted Specified
Foreign Financial Assets

If you reported a specified foreign
financial asset on certain other forms
listed below for the same tax year, you
may not have to report it on Form 8938.
-10-

Foreign grantor trusts. If you are
treated as an owner of any part of a
foreign grantor trust, you may have to
file Form 8938 to report specified
foreign financial assets held by the trust.
If you are a beneficiary of the foreign
trust, you may have to file Form 8938 to
report your interest in the trust. You do
not have to report on Form 8938 any
specified foreign financial asset held by
the trust or your interest in the trust if
you report the trust on a Form 3520 you
timely file for the tax year and the trust
timely files Form 3520-A for the tax
year.

Part V. Detailed Information for
each Foreign Deposit and
Custodial Account Included in
the Part I Summary

Use Part V to report information for
foreign deposit and custodial accounts.
If you have more than one account,
attach a continuation sheet with the
required information for each additional
account and check the box at the top of
page 1 of the form.
Lines 1 through 9. Enter the following
information for each foreign deposit or
custodial account.
Line 1. Check the box to indicate if
this is a depository or a custodial
account.
Line 2. Enter the account number of
the account or other specific identifying
information for the account if there is no
account number.
Line 3. Check one or more boxes to
indicate if any of the following applies.
• The account was opened during the
tax year.
• The account was closed during the
tax year.
• The account was jointly owned with
your spouse.
• You did not report any tax item in Part
III for this asset.
Line 4. Enter the maximum value of
the account during the tax year.
Instructions for Form 8938 (2018)

See Reporting Maximum Value,

TIP earlier, for information on

determining the maximum value
of the account.
Joint interests. Use the following
rules to determine the maximum value
to report.
Spouses filing a joint return. You
and your spouse report the maximum
value of an account held jointly by you
and your spouse only once on the single
Form 8938 filed with your joint income
tax return.
Spouses filing separate returns.
You and your spouse each report the
maximum value of an account held
jointly by you and your spouse on your
separate Forms 8938 filed with your
separate income tax returns.
Other joint owners. Report the
maximum value of the entire jointly held
account on your Form 8938 filed with
your income tax return, regardless of
the value of your separate interest in the
account.

tool at IRS.gov/businesses/
corporations/fatca-foreign-financialinstitution-list-search-and-downloadtool.
If your search returns multiple
instances of the same name for the
financial institution, use the one that
most closely matches the information
that you have. You will not be subject to
penalties if you enter the wrong GIIN or
leave this field blank. Completing this
information may reduce the need for the
IRS to contact you.

acquisition and/or disposition, as
applicable. If the assets were acquired
or disposed of during different dates in
the year, enter “Various.”
2. If you own the account or asset
jointly with your spouse, check the box
on line 3c.
3. If you did not report any income,
gain, loss, deduction, or credit for this
account or asset on your tax return or
any schedule or form attached to your
income tax return filed for the tax year,
check the box on line 3d.

Lines 8 and 9. Enter the mailing
address of the financial institution in
which the account is maintained.

Line 4. Check the box for the value
range that represents the maximum
value of the account or asset during the
tax year. If the maximum value is more
than $200,000, enter the maximum
value on line 4e.

DRAFT AS OF
October 18, 2018

Lines 5 and 6. If you used a foreign
currency exchange rate to convert the
value of the account into U.S. dollars,
check the “Yes” box on line 5 and go to
line 6. Otherwise, check the “No” box
and go to line 7.
Line 6. If you answered “Yes” on
line 5, enter the following information.
1. The foreign currency in which the
account is maintained.
2. The foreign currency exchange
rate used to convert the value of the
account into U.S. dollars.
3. If the U.S. Treasury Bureau of the
Fiscal Service did not provide an
exchange rate, the source of the foreign
currency exchange rate that you used.
You must use the foreign
currency exchange rate on the
CAUTION last day of the tax year, even if
you closed or disposed of the account
before the last day of the tax year.

!

Line 7a. Enter the name of the
financial institution in which the account
is maintained.
Line 7b. If you have been furnished
the Global Intermediary Identification
Number (GIIN) associated with the
financial account listed in line 7a, enter it
here.
If you haven't been provided a GIIN
by your financial institution, you can look
it up by using the FATCA Foreign
Financial Institution (FFI) List Search
and Download tool. You can access the
Instructions for Form 8938 (2018)

Part VI. Detailed Information for
each "Other Foreign Asset"
Included in the Part II Summary

Use Part VI to report information for
financial accounts (other than foreign
deposit and custodial accounts) and
other specified foreign financial assets
not held in a financial account. If you
have more than one asset, attach a
continuation sheet with the required
information for each additional asset
and check the box at the top of page 1
of the form.
Lines 1 through 8. Enter the following
information for each financial account
and specified foreign financial asset not
held in a financial account reported in
Part II. For examples of specified foreign
financial assets not held in a financial
account, see Other specified foreign
financial assets, earlier.
Line 1. Enter a description of the
account or asset. If the asset is stock or
securities, include the class or issue of
the stock or securities.
Example 1. You own 100 shares of
XYZ Company, an Italian S.A. A
sufficient description is “100 Class A
shares of XYZ Company, S.A.”
Example 2. You own a bond issued
by AB GmbH, a German GmbH. A
sufficient description is “Bond of AB
GmbH, maturing on December 31,
2017.”
Line 2. Enter the identifying number
or other information identifying the
account or asset.
Line 3. Enter the following
information about the account or asset,
if required.
1. If the account was opened or
closed, or the asset was acquired or
disposed of during the year, enter the
date of opening and/or closure, or
-11-

See Reporting Maximum Value,

TIP earlier, for information on

determining the maximum value
of the account or asset.
Joint interests. Use the following
rules to figure the maximum value to
report.
Spouses filing a joint return. You
and your spouse report the maximum
value of an account or asset held jointly
by you and your spouse only once on
the single Form 8938 filed with your joint
income tax return.
Spouses filing separate returns.
You and your spouse each report the
maximum value of an account or asset
held jointly by you and your spouse on
your separate Forms 8938 filed with
your separate income tax returns.
Other joint owners. Report the
maximum value of the entire jointly held
account or asset on your Form 8938
filed with your income tax return,
regardless of the value of your separate
interest in the account or asset.
Lines 5 and 6. If you used a foreign
currency exchange rate to convert the
value of the account or asset into U.S.
dollars, check the “Yes” box on line 5
and go to line 6. Otherwise, check the
“No” box and go to line 7.
Line 6. If you answered “Yes” to
line 5, enter the following information.
1. The foreign currency in which the
account or asset is denominated.
2. The foreign currency exchange
rate used to convert the value of the
account or asset into U.S. dollars.
3. If the U.S. Treasury Bureau of the
Fiscal Service did not provide an
exchange rate, the source of the foreign
currency exchange rate that you used.

You must use the foreign
currency exchange rate on the
CAUTION last day of the tax year, even if
you closed the account or sold or
disposed of the asset before the last
day of the tax year.

!

Lines 7a through 7e. If the account
or asset you reported on line 1 is stock
of a foreign entity or an interest in a
foreign entity, complete lines 7a through
7e.

Lines 8a through 8e. If the account
or asset you reported on line 1 is not
stock of a foreign entity or an interest in
a foreign entity, complete lines 8a
through 8e.
Note. If this account or asset has more
than one issuer or counterparty, copy
the continuation statement provided
after page 2 as many times as needed
and complete a separate line 8 for each
issuer or counterparty. Check the box at
the top of page 1 of the form.

You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by section 6103.

DRAFT AS OF
October 18, 2018

Line 7a. Enter the name of the
foreign entity.

Line 7b. If you have been furnished
the GIIN associated with the financial
account or asset listed in line 7a, enter it
here.
If you haven't been provided a GIIN
by your financial institution, you can look
it up by using the FATCA Foreign
Financial Institution (FFI) List Search
and Download tool. You can access the
tool at IRS.gov/businesses/
corporations/fatca-foreign-financialinstitution-list-search-and-downloadtool.
If your search returns multiple
instances of the same name for your
financial institution, use the one that
most closely matches the information
that you have. You will not be subject to
penalties if you enter the wrong GIIN or
leave this field blank. Completing this
information may reduce the need for the
IRS to contact you.
Line 7c. Check the box on line 7c to
indicate the type of foreign entity.
Lines 7d and 7e. Enter the mailing
address of the foreign entity.

Line 8a. Enter the name of the
issuer or counterparty and check the
appropriate box to indicate if you are
reporting for an issuer or a counterparty.
Line 8b. Check the appropriate box
to indicate the type of issuer or
counterparty.

Line 8c. Check the box to indicate if
the issuer or counterparty is a U.S.
person or a foreign person.
Lines 8d and 8e. Enter the mailing
address of the issuer or counterparty. If
the issuer or counterparty has a mailing
address in the United States, you can
enter the U.S. mailing address.
Paperwork Reduction Act Notice.
We ask for the information on this form
to carry out the Internal Revenue laws of
the United States. Section 6038D
requires specified individuals and
specified domestic entities to report
specified foreign financial assets in
which they have an interest. Form 8938
is used to comply with this reporting
requirement.

-12-

The time needed to complete and file
this form will vary depending on
individual circumstances. The estimated
burden for business taxpayers filing this
form is approved under OMB control
number 1545-0123. The estimated
burden for all other taxpayers who file
this form is shown below.
Learning about
the law or the
form . . . . . . . . . .
Preparing the
form . . . . . . . . . .
Copying,
assembling,
and sending the
form to the IRS . .

57 min.
2 hrs., 52 min.

48 min.

If you have comments concerning the
accuracy of this time estimate or
suggestions for making this form
simpler, we would be happy to hear
from you. See the instructions for the tax
return with which this form is filed.

Instructions for Form 8938 (2018)

Index
A
Assets Not Required To Be
Reported:
Bona fide resident of a
U.S. possession 8
Domestic bankruptcy
trusts 8
Domestic investment
trusts 8
Duplicative reporting 8
Excepted financial
accounts 8
Foreign grantor trusts 8
Other excepted specified
foreign financial
assets 8

Items of Interest 1
Purpose of Form 1
Specified Foreign
Financial Assets 1
What's New 1
When and How To File 1

Part I, Foreign Deposit and
Custodial Accounts
Summary:
Line 1 10
Line 2 10
Line 3 10
Line 4 10
Line 5 10
Part II, Other Foreign Assets
Summary:
Line 1 10
Line 2 10
Line 3 10
Part III. Summary of Tax
Items Attributable to
Specified Foreign
Financial Assets 10
Part IV. Excepted Specified
Foreign Financial Assets:
Foreign grantor trusts 10
Part V. Detailed Information
for each Foreign Deposit
and Custodial Account
Included in the Part I
Summary:
Line 1 10
Line 2 10
Line 3 10
Line 4 10
Line 5 10
Line 6 10
Line 7 10
Line 8 10
Line 9 10
Part VI. Detailed Information
for each "Other Foreign
Asset" Included in Part II
Summary:
Joint interests 11
Line 1 11
Line 2 11
Line 3 11
Line 4 11
Lines 5 and 6 11
Lines 7a through 7d 11
Lines 8a through 8e 11
Penalties, Accuracy-Related:
Examples 9
Penalties, Criminal 9
Penalties 9
Continuing failure to file. 9
Effect of foreign
jurisdiction laws 9
Failure-to-File Penalty 9
Married taxpayers filing a
joint income tax
return 9
Presumption of maximum
value 9
Reasonable cause
exception 9
Presence abroad. 4
Purpose of Form 1

Foreign currency
conversion 7
Reporting the value of
jointly owned assets 7
Valuing financial
accounts 7
Valuing interests in foreign
estates, foreign
pension plans, and
foreign deferred
compensation plans. 7
Valuing interests in foreign
trusts 7
Valuing other specified
foreign financial
assets 7
Reporting Period:
Examples 7
Exception for partial tax
years of specified
individuals. 7
Reporting the value of jointly
owned assets:
Married specified
individuals filing a joint
income tax return 7
Married specified
individuals filing
separate income tax
returns 7
Other joint ownership 7
Reporting Thresholds:
Married taxpayers filing a
joint income tax return
and living in the United
States 3
Married taxpayers filing
separate returns and
living in the United
States 3
Presence abroad 3
Reporting Threshold
Applying to Specified
Individuals 3
Taxpayers living abroad 3
Unmarried taxpayer living
in the United States 3

DRAFT AS OF
October 18, 2018

C
Criminal Penalties 9
D
Determining the Total Value
of Your Specified Foreign
Financial Assets:
Assets reported on
another form 4
Asset with no positive
value 4
Joint interests 4
Value of an interest in a
foreign estate, foreign
pension plan, and
foreign deferred
compensation plan. 4
Value of an interest in a
foreign trust during the
tax year. 4
Valuing specified foreign
financial assets 4
E
Excepted Specified
Domestic Entities 3
Certain domestic trusts 3
Domestic trusts owned by
one or more specified
persons 3
Entities described in
section 1473(3) 3
Exception if no income tax
return required. 1

I
Identifying Information.:
Form 8938 for previously
filed annual return 10
Taxpayer identification
number (TIN) 10
Type of filer 10
Interests in Specified Foreign
Financial Assets:
Assets generating certain
unearned income of
children (Kiddie tax
election) 6
Assets held by
disregarded entities. 6
Assets held by entities
that are not
disregarded entities 6
Assets held by grantor
trust 6
Assets held in financial
accounts 6
Foreign estates and
foreign trusts 6
Foreign pension plans and
foreign deferred
compensation plans. 6
Jointly owned assets 6
J
Joint interests 4
Joint Interests:
Examples 5
Joint ownership with a
spouse who is not a
specified individual or
someone other than a
spouse. 4
Joint ownership with
spouse filing joint
income tax return. 4
Joint ownership with
spouse filing separate
income tax return. 4

F
Failure-to-File Penalty 9
Continuing failure to file. 9
Foreign currency conversion:
Currency determination
date 7
Fraud Penalty 9

M
Married taxpayers filing a
joint income tax return
living outside the United
States 3
Married taxpayers filing
separate income tax
returns living outside the
United States 4

G
General Instructions:
Future developments 1

P
Paperwork Reduction Act
Notice 12

R
Reporting Maximum Value:
Assets with no positive
value 7
-13-

S
Special Rules:
Assets reported on
another form 4
Specific Instructions:
Additional sheets 9
Before you begin 9
Specified Domestic Entity 2
Closely held domestic
corporation 2
Closely held domestic
partnership 2
Connected stock or
partnership
ownership 2
Constructive ownership 2
Current beneficiary 3
Domestic trusts 3

Specified Domestic Entity (Cont.)

Exception from passive
income treatment for
dealers 2
Passive income 2
Passive income or assets
of related corporations
and partnerships 2
Percentage of passive
assets held by a
corporation or
partnership 2
Special rule for general
powers of
appointment 3
Specified Foreign Financial
Assets:
Assets held for
investment 5

Financial account 5
Foreign financial
institution 5
Foreign social security 5
Other specified foreign
financial assets 5
Specified Individual 1, 2
Special rule for dual
resident taxpayers 1
Special rules for resident
aliens 1
Specified individual filing as a
nonresident alien at the
end of his or her taxable
year 1
Specified individual filing as a
resident alien at the end of
his or her taxable year 2

Statute of Limitations:
Extended statute of
limitations 9
T
Taxpayers living outside the
United States 3
Tax year. 10

V
Valuing other specified
foreign financial assets.:
Example 7
W
When and How To File:
Individual taxpayers
transitional rule. 1
Who Must File:
Exception if no income tax
return required 1
Specified individual 1

DRAFT AS OF
October 18, 2018
U
Unmarried taxpayers living
outside the United
States 3

-14-