Any United States person with a \u201cfinancial interest\u201d in or \u201csignature\nauthority\u201d over a foreign financial account, where the aggregate value of all\nforeign financial accounts exceeds $10,000 at any point during the year, must\nfile a Foreign Bank Account Report (FBAR). \nHowever, \u201cfinancial interest\u201d in or \u201csignature authority\u201d are often\nconfusing and misunderstood. <\/p>\n\n\n\n
\u201cSignature Authority\u201d in a Foreign Account<\/p>\n\n\n\n
Signatory interest is more obvious and clear. The general requirement is that those who can\ncontrol the disposition of funds in the account have signature authority, and\nmust file FBARs. If a person can sign on an foreign account then FBAR reporting\nis required. <\/p>\n\n\n\n
For certain employees or officers with signature authority\nover, but no financial interest in foreign financial accounts, an FBAR is\nrequired (in FBAR Part IV) but often the due date is deferred. <\/p>\n\n\n\n
\u201cFinancial interest\u201d in a Foreign Account<\/p>\n\n\n\n
The term \u201cfinancial interest\u201d is far less obvious and clear. Under FBAR reporting regulations (31 CFR \u00a71010.350\nReports of foreign financial accounts), accounts held in the name of entity,\ncan create a financial interest in a person if the entity falls within any of\nthe following categories: <\/p>\n\n\n\n
1) a corporation in which the U.S. person owns more than 50\npercent of the company\u2019s stock; <\/p>\n\n\n\n
2) a partnership in which the U.S. person receives profits\nor capital exceeding 50 percent; <\/p>\n\n\n\n
3) a trust in which the U.S. person is an owner of any part\nof the trust; <\/p>\n\n\n\n
4) a trust in which the U.S. person (1) \u201chas a present\nbeneficial interest in more than 50 percent of the assets\u201d or (2) \u201creceives\nmore than 50 percent of the current income;\u201d or <\/p>\n\n\n\n
5) an entity in which the U.S. person \u201cowns directly or\nindirectly more than 50 percent of the voting power, total value of the equity\ninterest or assets, or interest in profits,\u201d other than a corporation,\npartnership, or trust. <\/p>\n\n\n\n
How We Can Help with FBAR Reporting<\/p>\n\n\n\n
If you have questions about the filing requirements and potential tax implications of your foreign accounts, you must seek the counsel of an experienced tax attorney. We offer a free consultation with the protection of attorney-client privilege to help people understand their legal options. <\/p>\n","protected":false},"excerpt":{"rendered":"
Any United States person with a \u201cfinancial interest\u201d in or \u201csignature authority\u201d over a foreign financial account, where the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the year, must file a Foreign Bank Account Report (FBAR). However, \u201cfinancial interest\u201d in or \u201csignature authority\u201d are often confusing and misunderstood. \u201cSignature […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3804","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=3804"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3804\/revisions"}],"predecessor-version":[{"id":3808,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3804\/revisions\/3808"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=3804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=3804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=3804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}