US Citizen Living Abroad - Is form 8938 Required?

[Yardley CPA]

Client is a US Citizen who has lived in South Africa since 2010.  During 2013 he married a South African Citizen.  He did not return to the United States at all during 2014.  I plan to file MFS.  He provided me with a letter from his employer indicating his income in US Dollars amounted to $70,322.  In addition, he provided a summary from a South African investment firm showing information in the attachment I am including on this post.  The conversion rate at 12/31/14 for South African Rand was 11.5588.  

 

Based on this information, I calculate his dividends during the period as $829 (9,577/11.5588)

 

He did withdraw a significant amount from the fund as you can see in the summary but I did not receive any additional information from him.

 

I have not completed form 8938 in the past as this is the first year he provided me with a summary from a foreign financial institution.  

 

I only have two foreign clients and do not routinely complete returns requiring forms 8938 or 8960.  Not sure if either are required here?  Also unsure if FinCen 114 is required?  I believe the earned income will be excluded in total on 2555 (at least that's what happened when I completed the form.)

 

The last thing I want to do is provide incorrect information to this client and I do not want to file a return that is less than accurate.  With that in mind, my inclination is to file an extension and research this more or suggest that he find a tax preparer (possibly in South Africa) that is more familiar with his situation?  I recognize there are probably not many preparers in South Africa familiar with US Tax requirements.  

 

Would appreciate any suggestions.  Thanks in advance. 

 

 

 

 

  

Stanlib YE Info.pdf

[joanmcq]

He has to file the FINCEN, but I don't think an 8938 is required. I just looked at the instructions for the form to see if one of my clients needed to file it. The account limits are much higher if the taxpayer is living abroad. Sorry I only remember the limit is $150000 for an MFJ living in the US.

[MsTabbyKats]

It's currently $100,000 on 12/31...or $150,000 at anytime during the year if you live here.

 

If you're abroad...it's $400,000 or 12/31...or $600,000 at any time during the year

[joanmcq]

Thanks for the correction; I just skimmed it and knew my clients didn't have to file it!

[PatHack]

Looks like your client has a PFIC.  You'll likely have to include 8621 and get historic data from the client of when he put money in, distributions, div reinvested.  The US tax impact will be shocking.  Even if he had substantial assets to include the 8938, this investment would likely not be reported on the 8938 as the 8938 makes an exception for assets reported on the 8621.  

 

South Africa has a lot of good accountants, but the chance of finding any that know the US tax impact of this investment is near zero.  It will be up to you to review.