Hello Atlanta Tax Expert - Thanks for your invaluable service and help here.

1) I am an H1B visa holder in the US for past 10 years. I own a home in a foreign country (India) however it is not a source of rental income for me... my parents live in the house and I do not get any rent.
Do I still have to report simply owning a foreign home/property somewhere in my tax returns?

2) Regarding reporting interest income from foreign bank accounts. For ones that do not supply a 1099-INT.. I am calculating from bank annual statement and adding interest earned as additional 1099-INT box 1.
However, I have a CD equivalent in a foreign bank that matures after 5 years. Do I have to report total interest earned only after the CD matures or do I have to calculate the intermediate interest accured last year (CD was created mid last year) and report it as part of my 2012 tax returns?

Thanks in advance

1) No, you have NO obligation to report that property anywhere on your U.S. tax return.

2) You CAN wait for the CD tio mature and report the interest at maturity date, OR you can report the accrued interest year-to-year. Your Choice!

Thank you very much.
I had a question on a different note.

I transferred an earlier employer's 401K to a rollover IRA and then to my current employer's 401K, in 2012.
I received a 1099-R which states that amount rolled over (marked G on field#7) was to a qualified plan. But I also received a 1042-S and a 5498 form which I don't know what to do with. Appreciate your advise.

The Form 5498 provides an audit trail to the IRS about how much was contributed to your IRA. Do NOTHING with it, but keep it for your records.

I would have to see the Form 1042-S to determine what, if anything, needs to be done with it.

About question 2, I disagree.

For a CD greater than 1 year, you have to report accrued interest year to year. IRS Publication 550


If you buy a CD with a maturity of more than 1 year, you must include in income each year a part of the total interest due and report it in the same manner as other OID.


Or
26 USC 1272
For purposes of this title, there shall be included in the gross income of the holder of any debt instrument having original issue discount issued after July 1, 1982, an amount equal to the sum of the daily portions of the original issue discount for each day during the taxable year on which such holder held such debt instrument.

An American bank will generate a 1099-INT or a 1099-OID for you. A foreign bank will not generate that, but that does not mean you get a free pass on reporting interest till maturity. You have to report year to year for CDs > 1 year.

Thank you for the guidance on the 5498. In case it will enable you to provide some high level guidance - my 1042-S basically just has field 1 - Income Code 14 (Pensions, Annuities, Insurance, Premium etc) and field 2 - Gross Income (the actual rollover amount) and then SSN info added on field 14..
Field 1 amount is same as what is on my 1099-R.

Still wondering what to do with the 1042-S.

Below is my original question for reference -
I transferred an earlier employer's 401K to a rollover IRA and then to my current employer's 401K, in 2012.
I received a 1099-R which states that amount rolled over (marked G on field#7) was to a qualified plan. But I also received a 1042-S and a 5498 form which I don't know what to do with. Appreciate your advise.

Quote:

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Originally Posted by AtlantaTaxExpert

The Form 5498 provides an audit trail to the IRS about how much was contributed to your IRA. Do NOTHING with it, but keep it for your records.

I would have to see the Form 1042-S to determine what, if anything, needs to be done with it.

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Keep the Form 1042-S for your records, but the Form 1099-R has all of the required information to report the rollover on your tax return.