I have stocks in the company i work for (Canadian corporation)...not much just 30 shares or so amounting to 120 dollars.
I think i am on the right track, but is it safe to say that i would fill this aformentioned information regarding my stock on part 2: "other foreign assets" on the 8938 as opposed to part 1?
Also....can anyone tell me if my company Defined BENEifit Plan has to be tabulated on the 8938?
8938 part 1 or 2?
Moderator: Mark T Serbinski CA CPA
thanks testone,
with regards to the defined benefit plan, i have no information on this plan therefore would not know how to tabulate it on the 8938.
I will keep digging for information, but acutally need direct clarification on this.
i do not find calling the IRS a great way to solve problems as they differ there answers from agent to agent.
with regards to the defined benefit plan, i have no information on this plan therefore would not know how to tabulate it on the 8938.
I will keep digging for information, but acutally need direct clarification on this.
i do not find calling the IRS a great way to solve problems as they differ there answers from agent to agent.
A defined benefit plan has to be on the 8938, unlike the FBAR where it is not listed. You may be surprised to see how much money is put aside by your company, and likely with a few years under one's belt the value is close or over the 200/300K reporting threshold for preparing a 8938 (if living outside the U.S.). Your benefits department should be able to give you a "commuted value", which would be the amount you would receive if you were to leave the company. This may take some explaining since they'll likely have no idea what you are talking about.
A defined contribution plan, however, has to be on both 8938 and FBAR.
Remember to cross-check your FBAR with the 8938. 8891 should add "1" to the 3520 number, if you had a trust that requires this. Other forms are also specifically called out. If there is an account not counted on that section, then it also needs to be called out further in the appropriate section on the 8938.
I also called the IRS for help, and they advised that I didn't need to add defined benefit info since there was no current value. My accountant begged to differ and I decided to follow the later's advice.
You'll also need to pay close attention to who owns the pension plan, i.e. your employer or the pension plan company. Maybe others have ideas here but my approach was the employer since they ultimately have control.
Not an expert (no accounting or legal background), but recently lived through this and paid for this advice. Hence all the disclaimers that usually go with this.
A defined contribution plan, however, has to be on both 8938 and FBAR.
Remember to cross-check your FBAR with the 8938. 8891 should add "1" to the 3520 number, if you had a trust that requires this. Other forms are also specifically called out. If there is an account not counted on that section, then it also needs to be called out further in the appropriate section on the 8938.
I also called the IRS for help, and they advised that I didn't need to add defined benefit info since there was no current value. My accountant begged to differ and I decided to follow the later's advice.
You'll also need to pay close attention to who owns the pension plan, i.e. your employer or the pension plan company. Maybe others have ideas here but my approach was the employer since they ultimately have control.
Not an expert (no accounting or legal background), but recently lived through this and paid for this advice. Hence all the disclaimers that usually go with this.
i Think i might have found the answer hidden in the 8938 instructions....part 2?
If so (part 2) then the value of the fund is nothing more than a check mark from 0 to 50k, 50 -100 k etc...
it seems only when you get over 200k do you have to accuratley report the value.
my DB plan statement has me getting 37k per year@ retirement (i know its pitiful) so therefore i should just check box "a" (?)
If so (part 2) then the value of the fund is nothing more than a check mark from 0 to 50k, 50 -100 k etc...
it seems only when you get over 200k do you have to accuratley report the value.
my DB plan statement has me getting 37k per year@ retirement (i know its pitiful) so therefore i should just check box "a" (?)
I filled in Part II for the defined benefit pension plan. In my case:
(1) Asset is the official name of the pension plan
(2) This is the pension plan registration number, which should be on your pension statement or available from your employer (took about a week to obtain in my case)
(3) A and B not filled in, since not applicable. D checked since nothing received in 2011.
(4) The commuted value. If over $200K, then the actual amount on December 31st 2011. Remember to use 1.018 as the exchange rate for Canada.
(5) Checked since foreign exchange rate used
(6) For (1), Canada, dollar, and for (2) 1.018000000.
(7) Not filled in
(8) A = employer, B = Issuer, C = Foreign Person, D-E = address
I chose to use commuted value. Not what I would get at retirement but what has accumulated over the years. Again you may be surprised at how much is there if you worked for a few years.
Hope this helps. Good luck. Again I’m not an expert but I trust the help I received.
(1) Asset is the official name of the pension plan
(2) This is the pension plan registration number, which should be on your pension statement or available from your employer (took about a week to obtain in my case)
(3) A and B not filled in, since not applicable. D checked since nothing received in 2011.
(4) The commuted value. If over $200K, then the actual amount on December 31st 2011. Remember to use 1.018 as the exchange rate for Canada.
(5) Checked since foreign exchange rate used
(6) For (1), Canada, dollar, and for (2) 1.018000000.
(7) Not filled in
(8) A = employer, B = Issuer, C = Foreign Person, D-E = address
I chose to use commuted value. Not what I would get at retirement but what has accumulated over the years. Again you may be surprised at how much is there if you worked for a few years.
Hope this helps. Good luck. Again I’m not an expert but I trust the help I received.
it does help...thank so much Dualcan.
before you leave this thread can you elaborate on the 8938 part 2 items 8a thru e?
Here is my understanding;
8a is the companies name (that i work for)
8b unclear of which box i would check....are they asking info on the company or me? If the company then i would check the box for corporation (?)
8d assuming the mailing address for the company i work for...as i have no idea where the pension plan is held.....
before you leave this thread can you elaborate on the 8938 part 2 items 8a thru e?
Here is my understanding;
8a is the companies name (that i work for)
8b unclear of which box i would check....are they asking info on the company or me? If the company then i would check the box for corporation (?)
8d assuming the mailing address for the company i work for...as i have no idea where the pension plan is held.....
I did make an error that you caught in my reply.
8a should by company name of employer and issuer
8b should be Corporation
The rest is correct
8d is the address of the employer.
If you ask your company for the commuted value, they will likely give you a detailed statement that they would give to employees i.e. leaving the company. This should tell you who holds the pension plan on their behalf. A bit of a moot point, however, if you write down the company name as issuer.
8a should by company name of employer and issuer
8b should be Corporation
The rest is correct
8d is the address of the employer.
If you ask your company for the commuted value, they will likely give you a detailed statement that they would give to employees i.e. leaving the company. This should tell you who holds the pension plan on their behalf. A bit of a moot point, however, if you write down the company name as issuer.
OK on a bit of a roll now, do maybe Dualcan can kill two birds with one stone on this one.
I have the defined benefit plan straight in my head for part 2....i now have a question about my shares in the same company.
I own less than 30 shares of this company which is held @ Computershare i Toronto....(equates to about 119 dollars)
when it comes to part 2, i assume i would fill in line 7a as `Computershare`with the appropriate address in toronto...or do i fill in the companies name.
Also, for line 7b, the type of foreign entity would be what ...a corporation or a trust. I ask this because these are shares of the company i work for but managed by a third party...computershare.
I have the defined benefit plan straight in my head for part 2....i now have a question about my shares in the same company.
I own less than 30 shares of this company which is held @ Computershare i Toronto....(equates to about 119 dollars)
when it comes to part 2, i assume i would fill in line 7a as `Computershare`with the appropriate address in toronto...or do i fill in the companies name.
Also, for line 7b, the type of foreign entity would be what ...a corporation or a trust. I ask this because these are shares of the company i work for but managed by a third party...computershare.
I'd like to be helpful on this one but my situation is different re stocks held by employer. I work for a subsidiary of a U.S. based company and all my shares/stock options are held by a U.S. based investment firm. Since I set this up as an american citizen, they send info direct to the IRS and I do not have to report these accounts besides the CDN/US reporting of sale/exercise of shares.
I would venture to guess that you have an account that holds the stock, so you are likely correct to list the investment firm. They would tell you if this is setup as a trust, which is possible. Then this would be a foreign grantor trust and you would have to do some reporting as beneficiary?
Totally in the dark on this one. Sorry!
I would venture to guess that you have an account that holds the stock, so you are likely correct to list the investment firm. They would tell you if this is setup as a trust, which is possible. Then this would be a foreign grantor trust and you would have to do some reporting as beneficiary?
Totally in the dark on this one. Sorry!
Instructions for Form 8938 (November 2011)
Page 2-
Value of an interest in a foreign foreign estate, foreign pension plan, and foreign deferred compensation plan....If you received no distributions during the tax year and do not know or have reason to know based on readily accessible information the fair market value of your interest, use a value of zero for the interest....
The commuted value is not readily accessible. Neither it is fair market value. I would just use the IRS recommended value of zero. I hope others will jump in here but I don't think the IRS is going after employer controlled defined benefit plans.
Page 2-
Value of an interest in a foreign foreign estate, foreign pension plan, and foreign deferred compensation plan....If you received no distributions during the tax year and do not know or have reason to know based on readily accessible information the fair market value of your interest, use a value of zero for the interest....
The commuted value is not readily accessible. Neither it is fair market value. I would just use the IRS recommended value of zero. I hope others will jump in here but I don't think the IRS is going after employer controlled defined benefit plans.
Thanks to Filo for referencing this URL in another thread.
http://www.groom.com/media/publication/ ... ebsite.pdf
If the taxpayer received no distributions during the tax year and does not know or have reason to know (based on readily accessible information) the fair market value of his or her interest in a foreign pension and/or deferred compensation plan, then the taxpayer must still report the interest in the plan on the Form 8938, but may use a value of zero for the interest. Recently
added Q&As on the IRS website indicate that in that circumstance, though, the value of zero can be used for determining the reporting threshold.)
http://www.groom.com/media/publication/ ... ebsite.pdf
If the taxpayer received no distributions during the tax year and does not know or have reason to know (based on readily accessible information) the fair market value of his or her interest in a foreign pension and/or deferred compensation plan, then the taxpayer must still report the interest in the plan on the Form 8938, but may use a value of zero for the interest. Recently
added Q&As on the IRS website indicate that in that circumstance, though, the value of zero can be used for determining the reporting threshold.)