Need more help with 8938 part 2

backcountry · Post by **backcountry** » Mon Jun 04, 2012 11:31 am

Filo, regarding your comment "when I don't sell the asset but I do have distributions from the asset, the 1116-FTC I have arises from the distributions, *not* from 'holding or disposing of the asset,'" you have distributions because you hold the asset (or held it through it's record date) so I'm not convinced by your semantic argument.

Overall, my view on IRS instructions in general is that they are pretty good and where they fail it's the result of either excessive complexity in the law or, especially in this case, new laws requiring new forms. Sometimes a new law is passed and someone at the IRS needs to make a judgement call about getting the form and instructions out on time or doing more editing.

As you can tell, I read the instructions very carefully and where there are some ambiguities I try to use some common sense to infer a reasonable meaning. Other than writing to the IRS to request clarification (which one of us should do), there's not much else we can do. I'm sure there will be better instructions next year.

nelsona · Post by **nelsona** » Mon Jun 04, 2012 11:47 am

wow, backcountry, you continue to shine.

Asking for minutiae from this forum on a form that has hardly even dried is silly, in my opinion, which is why (as you may have all noticed) I have been unusually quiet on the topic obn the 2 new forms. Even asking IRS on this moving target would be a wasste of time at this point, but far better that reading tealeaves (if only to put this topic to bed for this year).

It really doesn't matter if the account is called one thing or another, or if it goes on this part or that.

File, to the best of your ability, ask a copule of question (or pay someone, but don't do both), and correct later if you have to.

Mach7 · Post by **Mach7** » Mon Jun 04, 2012 3:46 pm

Actually...i WAS wondering why Nelsona was silent on 8938...but when you think about it makes sense.

As for myself, i have been going in circles over one account...(.more than a waste of time)

This new forum is still in the test flight stage...so all we can do is our best.....part 1 or part 2..who really cares...

I can tell you in conversation with the IRS (on three separate occasions) they don' seem to care....in fact...if i didn't know better i would say that they despise this form more than we do!

Mach7 · Post by **Mach7** » Mon Jun 04, 2012 3:47 pm

sorry...meant to say new FORM (not FORUM)

one time poster · Post by **one time poster** » Tue May 21, 2013 4:26 pm

fwiw, i own stock in a canadian company that is held by computershare and it is clear to me that that this should be reported in part 2.

i also own the same stock in a brokerage account which does not need to be reported. stupid form.

computershare sends out 1099s so taxpayer can't hide dividend income. stupid form.

i bet non compliance with the form is off the charts. anybody who bought wendys stock years ago became the owner of a foreign stock after they spun off tim hortons which later became chartered in canada. i'm sure there are plenty of other examples.

Mach7 · Post by **Mach7** » Wed May 22, 2013 9:06 am

@one time poster

Of course you are correct..in hindsight this stock should be reported on Part 2, and this year (for me)it will be.

As Nelsona eluded to on this thread some time ago, part 1 or part 2 is not the issue rather that the account has been reported. An error here can be easily corrected and I don't believe a fine would be levied as the account HAS been reported.

The difference in FBAR reporting for the same account, is that this form asks for the "financial institution" in this case it would be Computershare (?) where on the 8938 it asks for the foreign entity, which would (IMO) be the name of the stock ie: 'widget' . .

nelsona · Post by **nelsona** » Wed May 22, 2013 9:31 am

I'm puzzled by one time's comment that reporting is based on which firm holds the share for him.

For foreign holdings purposes, why would it make a difference?

one time poster · Post by **one time poster** » Wed May 22, 2013 10:10 am

the other shares are held in a "brokerage accounts maintained by a
U.S. financial institution" and thus do not need to be reported according to page 6 of the instructions.

computershare does not meet that definition and thus shares they hold are reportable.

thats my interpretation, anyway.

nelsona · Post by **nelsona** » Wed May 22, 2013 10:17 am

If you live in canada, should you be having a US broker?

They are in violation of Cdn securities laws if they accept trades from you, unless they are licensed in canada (in which case they would have set upa Cdn branch to deal with you), or if this is a retirement account.