HI,

I am very unclear on this new form.
I know I have to fill out the FBAR and have foreign bank accounts that amount to about $20k in total.

I also have a foreign property that I rent out full time and have a foreign mortgage on the property to which the payments are made in that country. Everything regarding it happens in that country. Nothing comes from the US.

I am married and filing jointly so I believe I have to have go over $100k in "foreign financial assets" in order to be required to file form 8938 - so it looks like I don't have to file it with the $20k in my bank accounts.

I understand the property itself is a tangible asset and not a foreign financial asset.
Ok. Then what about the mortgage?

Can someone please help me understand what I need to do?
Is the foreign mortgage considered a "foreign financial asset"? Do I need to complete this form?

Thanks

The mortgage is a liability rather than an asset. Since it is not an asset, it cannot be a foreign financial asset.

However, you should take a look at Form 1042 and W-8BEN.

Thanks for the clarification.
So I take it I therefore do not need to submit Form 8938.

Why look at Form 1042?
Why do I need to file that?

It is a foreign mortgage and foreign bank. It is a double taxation treaty country which has a 0% agreement. I have a W-8BEN form from them too.

PS. I am not claiming mortgage interest deduction - just as expense on schedule E

Actually, the Form 8938 cutoff is $50,000, but, as IntlTax noted, your mortgage is a liability, and the house itself is a capital asset, not a financial asset.

Based on those facts, you have NO requirement to file Form 8938.

Thanks very much ATE for your input.

One thing - just for others information. The cut off as I read it is in fact $100,000 - married and filing jointly
This is from IRS website: http://www.irs.gov/instructions/i8938/ch01.html



Married taxpayers filing a joint income tax return and living in the United States. If you are married and you and your spouse file a joint income tax return and do not live abroad, 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 and living in the United States. If you are married, file a separate income tax return from your spouse, and do not live abroad, 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.

Interesting! This is a NEW requirement this year, and I was told $50,000. However, your source of information CANNOT be impreached, so I must agree.