FBAR Questions [split topic]

[AfroKing 48]

I'm just trying to learn a thing about this FBAR as a potential LPR and maybe a U.S citizen  in the future. If an individual had an equivalent of $10,000 in their foreign account before becoming an LPR or a citizen, will they have to file the FBAR when they become an LPR/USC or the FBAR has to do with income earned within the time of becoming an LPR/USC?

 

My second: Let's say A becomes a USC, but sends some money occasionally into the foreign account and the account accrues to the $10k limit, will they have to report such account to IRS, even though it's just a saving put in there and not an active income from an occupation.

 

Thanks

Edited January 24, 2023 by TBoneTX

[Lil bear 4,261]

12 minutes ago, AfroKing said:

Please, i apologise if my question seems like i'm derailing the OP's original question, i'm just trying to learn a thing about this FBAR as a potential LPR and maybe a U.S citizen  in the future. If an individual had an equivalent of $10,000 in their foreign account before becoming an LPR or a citizen, will they have to file the FBAR when they become an LPR/USC or the FBAR has to do with income earned within the time of becoming an LPR/USC?

 

My second: Let's say A becomes a USC, but sends some money occasionally into the foreign account and the account accrues to the $10k limit, will they have to report such account to IRS, even though it's just a saving put in there and not an active income from an occupation.

 

Thanks

Any US tax year where a USC or LPR has financial interests outside the US which exceed $10000 USD.  at any time during that year , must file FBAR by April 15th the following year. FinCentral publishes an official currency exchange rate on Dec 31 st each year. That rate is the one used to determine the value of non USD assets when filing the FBAR 

[AfroKing 48]

2 hours ago, Lil bear said:

Any US tax year where a USC or LPR has financial interests outside the US which exceed $10000 USD.  at any time during that year , must file FBAR by April 15th the following year. FinCentral publishes an official currency exchange rate on Dec 31 st each year. That rate is the one used to determine the value of non USD assets when filing the FBAR 

By my understanding, reporting any account above the threshold is just for information purposes only and not for taxation, right? I don't think it's morally upright for the U.S Government to tax an income that was made before that individual becomes an LPR/USC. For instance, A has like $10k equivalent  in an account while working over the years in his/her country in 2022 and they migrate leaving that in the country's local account in 2023. Does it mean the IRS can tax what i would consider a labor and savings from another country even before that individual ever becomes an LPR/USC. 

 

I think most immigrants don't know this topic as this is the first time i'm hearing it. Thanks for shedding more light 

[TBoneTX 45,654]

The above posts were split from someone else's thread in the DCF forum.

[Wuozopo 4,293]

15 hours ago, AfroKing said:

By my understanding, reporting any account above the threshold is just for information purposes only and not for taxation, right?

Correct. It is a report and it does not even go on to the IRS on your tax return. It is a separate online submission to FinCEN (US Treasury) giving the bank(s) info, account number and highest balance during the year,

 

15 hours ago, AfroKing said:

I don't think it's morally upright for the U.S Government to tax an income that was made before that individual becomes an LPR/USC. For instance, A has like $10k equivalent  in an account while working over the years in his/her country in 2022 and they migrate leaving that in the country's local account in 2023. Does it mean the IRS can tax what i would consider a labor and savings from another country even before that individual ever becomes an LPR/USC. 

No worries. That money you hold is not “income” so no income tax. If it earns interest during the tax year, the interest should be reported just like interest you might earn on you US bank account. The full balance is not taxed whether you move some to US or back the other way.

[Mike E 11,741]

On 1/23/2023 at 7:06 PM, AfroKing said:

By my understanding, reporting any account above the threshold is just for information purposes only and not for taxation, right?

1. You report every account if the sum total balance across all accounts exceeds $10,000 usd. 
 

2. Income those  accounts generate has to be reported.