dual-status filing full year 1040 and FBAR

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Anna2024
Posts: 31
Joined: Fri Jun 14, 2024 9:19 pm

dual-status filing full year 1040 and FBAR

Post by Anna2024 »

Hello,

While reading the forum, I came across an interesting option to file a full year 1040 while being a dual-status (first year choice) thanks to the US-Canadian treaty and, as I see from all the posts, the FBAR requirements (a threshold is only 10k) happen to appear in one's life.

My question is about timing:

If you become a US resident during the year from a particular date and file a part-year 1040, you don't have FBAR requirements if you get rid of all these assets before becoming US resident/entering US (or at least manage to set them before the threshold of 10k)?

If this is correct, I presume that choosing to file a full-year 1040 according to US-Canadian treaty( and not using the possible election of internal US laws for married couples) will result in the same "not having any FBAR obligations" because the US-Canadian treaty doesn't change your residency (start date of your residency) but just allows you to avoid discrimination. I may be wrong since if you file a real full year 1040, you're supposed to have real problems associated with the filing.

I'm just looking to avoid this FBAR paperwork and possible penalties if mistakes happen. Help in this matter will be greatly appreciated!
nelsona
Posts: 18526
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: dual-status filing full year 1040 and FBAR

Post by nelsona »

The best way to avoid mistakes is simply to file FBAR. for all accounts held in the year of your move. It is simple, and oe need to get rid of accounts for that purpose. Nor is it worth filing dual status just to avoid FBAR>

We all file FBAR here, year after year. Don't fear it.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Anna2024
Posts: 31
Joined: Fri Jun 14, 2024 9:19 pm

Re: dual-status filing full year 1040 and FBAR

Post by Anna2024 »

Thank you very much,

I haven't even started looking at filing FBAR but while reading the forum, I just got an impression that it was so overwhelmingly difficult for such a low threshold that my first idea was just to get rid of this requirement right away.
nelsona
Posts: 18526
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: dual-status filing full year 1040 and FBAR

Post by nelsona »

No, There are other forms that are tricky an onerouse (like 3520, PFIC and FATCA), but no one has found FBAR to be either of those.

No posts here will indicate this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ND
Posts: 305
Joined: Thu Feb 21, 2013 5:28 pm

Re: dual-status filing full year 1040 and FBAR

Post by ND »

FBAR filing is simple, fast and easy and does not require professional knowledge. What trips people up is determining whether or not an account must be included. But guess what? No harm done by including all.
sk8man
Posts: 10
Joined: Sat Mar 02, 2024 12:34 pm

Re: dual-status filing full year 1040 and FBAR

Post by sk8man »

Yes, if you file a part-year 1040 and keep foreign assets below $10k before becoming a US resident, you won’t need to worry about FBAR. The US-Canada treaty helps with residency but doesn’t affect FBAR rules.
Anna2024
Posts: 31
Joined: Fri Jun 14, 2024 9:19 pm

Re: dual-status filing full year 1040 and FBAR

Post by Anna2024 »

Yes, I agree, it's better to report all your foreign accounts than to spend time on understanding what is mandatory to report and what is not.

Thank you for the advice.

If the US allowed part-year regular deductions, I'd definitely file a part-year return. My itemized deductions are still lower than the regular ones offered with a full-year return.
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