USD Money Market Account & 8938

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nelsona
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Post by nelsona »

An MM fund is NOT a bank account, otherwise it would not be issuing T3's nor distributing "other income".
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Mach7
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Post by Mach7 »

Ok...what am i dealing with here then?
Mach7
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Post by Mach7 »

If anyone can give me any positive direction with this thread i would greatly appreciate it. It seems this is even stumping the Firm that is (trying) to complete my 2011 tax.

Not sure why they should be stumped, but they seem to have to 'check' with someone everytime i ask this question.

I want to take Filo's advice, but also want to make sure i am doing things correctly.

thank you in advance
testone
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Post by testone »

I would just show it as dividend income on schedule B, but not as qualified dividend income. It should also be reported on 8621, but I don't believe there is a penalty for failing to file 8621.
testone
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Post by testone »

I guess the statute of limitations may remain open though (if no 8621 is filed).
Filo
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Post by Filo »

@nelsona from Filo -- thank you for straightening me out on that; interest is reported on a T5.
Mach7
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Post by Mach7 »

thanks testone...

i suppose that is one way of looking at it. I would think that if the form had to be filed and it was not, the only way to uncover it would be through an audit?

what about the discussed company shares?
Mach7
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Post by Mach7 »

with regards to the shares in the company i work for...i had this same discussion when i filed my FBARs and it was decided that this was nothing more than a 'securities' account.

should be simple and straight forward, and most likely it is....and although i have tabulated the dividend payouts on shedule B and lines 9a,b...i need to know if there is further reporting forms that need to be filled out.
Mach7
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Joined: Sun Dec 11, 2011 3:19 pm

Post by Mach7 »

OK, in light of all this information, here is my plan of attack and i welcome all comments.

with respect to my USD money market fund, this fund is held at RBC and i was mailed a T3 slip under 'other income'. I will try and fill out the 8621 form for this fund and will tabulate it on part 1 of the 8938 form.

with respect to the shares held by Computershare trust company for the company i work for....i was issued a T5 slip fore 'eligible dividends'. I will tabulate this account on part 2 of the 8938 form and fill out schedule B and place the dividend payout on line 9a.b of my 1040.

i welcome all comments and suggestions.
Filo
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Post by Filo »

@Mach7, about the money market instrument --

OK, even if it's not a bank account, it is an account, so it will still get listed in Part I of form 8938. As to whether it's Deposit or Custodial, I don't think that even the IRS will schmeise you for possibly getting that wrong, as they don't define those terms anyway.

testone's statement that you should report it as a Dividend on Schedule B certainly seems completely reasonable to me.

As far as the 8621 goes, one major issue, so far as I know, is whether submitting an 8621 this year is going to make the IRS slam you for not filing 8621's for previous years. No tax expert on this site is going to answer that question for you. And if you scour the web looking for advice on the 8621, you are going to find many deliberately vague statements like "US persons *may* be obliged . . .", and where there are (somewhat) clearer statements on the 8621, you are going to find contradictory opinions, particularly on which of the three options on the 8621 you can use, what the exact procedure is for using the option you choose, whether you have to backfile 8621's for previous years, if so for how many years, and if so what the traps are in doing the backfiling (are there penalties?, is there back interest?, does one have to a Section-1291 workup for the initial backfiled 8621 before being allowed to do a mark-to-market election for the subsequent backfiled 8621's?). You are not going to find any convincing answers to these questions, and it is quite possible that your accounting firm will not have the answers either. There are people who will not file an 8621 this year because the risks of filing & backfiling it look so bad. But nobody is going to make the decision for you. And the IRS won't help. You are not the only one in this boat; there are many of us.
Filo
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Post by Filo »

Your company shares held by Computershare --

One thing that scares me about the idea of listing that in Part II of 8938 is that if you decide to check "Trust" as the type of issuer, will that force you to submit a Form 3250, which is regarded as one of the all-time worst forms to fill out?

You have an *account* at Computershare. It seems to me that that would allow you to list this item in Part I, which avoids the above issue. And don't use the word "Trust" in the name of the financial institution. Just call it Computershare.
Mach7
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Post by Mach7 »

Filo,

Now that you put it that way...it would seem filing an 8621 at this point would be mute...so i dont think i will go down that road.
saniya029
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Post by saniya029 »

A financial instrument is a tradable asset of any kind, either cash; evidence of an ownership interest in an entity; or a contractual right to receive, or deliver, cash or another financial instrument.

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Mach7
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Post by Mach7 »

Hello saniya029....

so...does this mean you agree with my (our) position with regards to my accounts?
nelsona
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Post by nelsona »

That was spam, ignore.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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