U.S. OWNERS OF FOREIGN ENTITIES
U.S. PARTNERS OF FOREIGN PARTNERSHIPS
A US resident that owns an interest in a Foreign Partnership (FP) is required to report their share of the partnership’s distributive items on Form 1040 Schedule E, Part II, Income or Loss From Partnerships and S Corporations.
A US person that owns an interest in a FP may be required to attach to its Form 1040 a Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships to report the activities of the FP, Form 8938, Statement of Specified Foreign Financial Assets, FinCEN Form 114, a Report of Foreign Bank and Financial Accounts (FBAR).
Who must file Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships.
U.S. person who controlled the foreign partnership at any time during the partnership's tax year. Control of a partnership is ownership of more than a 50% interest in the partnership.
U.S. person who at any time during the tax year of the foreign partnership owned a 10% or greater interest in the partnership while the partnership was controlled by U.S. persons each owning at least a 10% interest.
U.S. person who contributed property during that person's tax year to a foreign partnership in exchange for an interest in the partnership, if that person either: owned directly or constructively at least a 10% interest in the foreign partnership immediately after the contribution, or the value of the property contributed exceeds $100,000.
U.S. person that had a reportable event during that person's tax year. There are three categories of reportable events: acquisitions, dispositions, and changes in proportional interests.
Who must file Form 8938, Statement of Specified Foreign Financial Assets
Specified individuals and specified domestic entities that have an interest in specified foreign financial assets and meet the reporting threshold. The Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN Form 114 (Report of Foreign Bank and Financial Accounts). See details…
Who must file FinCEN Form 114, a Report of Foreign Bank and Financial Accounts (FBAR)
A United States person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report if such person has a financial interest in or signature or other authority over at least one financial account located outside the United States and the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported. Unlike Form 8938, the FBAR (FinCEN Form 114) is not filed with the IRS. It must be filed directly with the office of Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, separate from the IRS. See details…