FBAR, FATCA, FINCEN Form 114, And Other IRS Reporting Requirements For Americans Overseas

“Kathleen, in a recent e-letter, your writer mentions that U.S. citizens are not required to disclose any overseas real property assets.

“Is the writer familiar with FBAR, FATCA, and FINCEN Form 114?

“To the best of my understanding, U.S. citizens are required to disclose certain foreign assets, real property being one of them.

“Could someone clarify what the author actually meant by this article? Here is the reference I’m speaking of:

“‘Third, you are not obliged to report property holdings overseas (in any form—rental apartment, house on the beach, finca, estancia, oceanfront lot, or titled agricultural investment) to the U.S. tax authorities.'”

–Anthony K., United States

The FBAR is a form for reporting offshore bank accounts. It’s the same thing as FINCEN Form 114. That is, those are one form, not two.

The FATCA form you’re thinking of is Form 8938, which is to do with foreign financial assets. Financial assets are paper assets. Therefore, real estate is not a reportable asset for Form 8938. You do have to report any income earned from real estate… and you would have to report any entity you use to hold a piece of real estate. In this case, the real estate would be listed as an asset of that entity, but full details of the property wouldn’t be required.

As your question suggests, dear reader, these and other filing requirements of our age for the American offshore are complicated, confusing, and burdensome.


“Kathleen, I am responding to the Mailbag letter from Randy G. of Panama, in which he complains about Paul Terhorst. I would just like to say that I thoroughly appreciate Mr. Terhorst’s writings, and, as a fellow CPA who also retired early (although not as early as he did!), I find his articles to be extremely accurate and informative, and I look forward to reading them.

“I’m sorry that Randy G. doesn’t share that opinion, but I don’t see how his disagreement with the point of view of just one of your writers makes your whole organization suspect. And I’m frankly concerned by his suggestion that you need to ‘denounce’ him.

“Perhaps his letter annoyed me more than it might have normally because just yesterday I received a phone call from my local bank here in Spain, telling me very apologetically that because of FATCA they are going to block our account in five days if I don’t send them some IRS documentation immediately.

“Fortunately, as both a CPA and a loyal reader, I knew that phone call might come eventually, so I had the documents ready. But it did serve as an abrupt reminder that, while Randy G. moved to ‘escape the continuous socialist bashing,’ my husband and I moved (partly) to escape the heavy-handed governmental overreach that was making our respective professions a nightmare.

“Anyway, please keep up the good work, and I look forward to continuing to hear from all of your writers, whether I agree with them or not!”

–Maria S., Spain

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