Is a Cash Account a Foreign Trust

[exPenn]

I have a Cash Account with TD Waterhouse (joint with my wife) where we hold most of our non-registered investments. At the moment, they are all GIC's, but we could buy and hold stocks, bonds, ETF's, etc. within it. I have disclosed this account in my wife's US tax filings - in her FBAR as a "Securities Account", and in her 8938 as a "custodial account". A US tax preparer advised us that this is not considered a foreign trust, so we have not been filing 3520 or 3520-A's, and the IRS has never asked for them. I'm still a little worried, though. Might the IRS consider a Cash Account to be a Foreign Trust?

[nelsona]

Non-registered accounts (not RRSP/RRIF/TFSA/RESP) are NOT trusts, so no 3520 reporting.

Don't foget that whatever you hold in any account other than RRSP is subject to PFIC rules.

[exPenn]

Thanks. It's good to hear that I don't have to file 3520's. A related question: If my wife decides to expatriate, where on Form 8854 should we list her share (50%) of the assets held in the Cash Account? Since we hold only GIC's within the account, should we list it with the other GIC's on Line 1., or somewhere else. In addition, what should we use for the basis (column b) for this asset. Should it be just the sum of the Principals of the GIC's, or is it like an RRSP, where the basis is the sum of all the contributions paid into the Cash Account since it was opened.

[nelsona]

Didin't you just ask this in another thread. Same answer.

[nelsona]

For expatriation the non-pension account that the investments are in means nothing. Its the holdings.

[exPenn]

Thanks, that's what I was asking.

[jenfin]

Somewhere I was told that TFSAs require trust reporting and do not have the same exemption as RRSPs. I have been filing 3520/3520A. Is that not correct. My TFSA with a Cdn bank holds securities.

[nelsona]

We aren't talking about TFSAs. TFSAs are trusts.

[nelsona]

and the securities held within are subject to PFIC reporting.