§ 1.6038D-1 Reporting with respect to specified foreign financial assets, definition of terms.
(a) In general.
(1) Specified person.
(2) Specified individual.
(3) Resident alien.
(4) Bona fide resident of a U.S. possession.
(5) U.S. possession.
(6) Specified foreign financial asset.
(7) Financial account.
(8) Financial institution.
(9) Foreign financial institution.
(10) Foreign entity.
(11) Annual return.
(12) Specified domestic entity.
(13) Model 1 IGA and Model 2 IGA.
(b) Effective/applicability dates.
(1) In general.
(2) Financial accounts.
§ 1.6038D-2 Requirement to report specified foreign financial assets.
(a) Reporting requirement.
(1) In general.
(2) Special rule for married specified individuals filing a joint annual return.
(3) Special rule for certain specified individuals living abroad.
(4) Special rule for married specified individuals filing a joint annual return and living abroad.
(5) Assets with no positive value.
(6) Aggregate value calculation in case of specified foreign financial asset excluded from reporting.
(i) Specified individual.
(ii) Specified domestic entity.
(7) Form 8938 filed with annual return.
(i) General rule.
(ii) Consolidated returns.
(8) Reporting required regardless of tax result.
(9) Reporting period.
(10) Successor forms.
(b) Interest in a specified foreign financial asset.
(1) In general.
(2) Property transferred in connection with the performance of services.
(3) Special rule for parent making an election under section 1(g)(7).
(4) Entities.
(i) In general.
(ii) Specified foreign financial assets held by certain trusts.
(iii) Specified foreign financial assets held by a disregarded entity.
(iv) Interest in a foreign trust or foreign estate.
(c) Special rules for joint interests.
(1) In general.
(i) Determining aggregate value of assets.
(ii) Reporting maximum value.
(2) Aggregate asset value for married specified individuals filing a joint annual return.
(3) Aggregate asset value for married specified individuals filing a separate annual return.
(i) Both spouses are specified individuals.
(ii) One spouse is not a specified individual.
(d) Annual return filed by a married specified individual.
(1) Joint annual return.
(2) Separate annual return.
(e) Special rules for dual resident taxpayers.
(1) In general.
(2) Dual resident taxpayer filing as a nonresident alien at end of taxable year.
(3) Dual resident taxpayer filing as a resident alien at end of taxable year.
(f) Example.
(1) Facts.
(2) Filing requirement.
(i) Married specified individuals filing separate annual returns.
(ii) Married specified individuals filing a joint annual return.
(g) Effective/applicability dates.
§ 1.6038D-3 Specified foreign financial assets.
(a) Financial accounts.
(1) In general.
(2) Financial account in a U.S. possession.
(3) Excepted financial accounts.
(i) Accounts maintained by U.S. payors.
(ii) Mark-to-market election under section 475.
(b) Other specified foreign financial assets.
(1) In general.
(2) Mark-to-market election under section 475.
(3) Held for investment.
(4) Trade-or-business test.
(5) Direct relationship between holding an asset and a trade or business.
(i) In general.
(ii) Presumption of direct relationship.
(c) Special rule for interests in foreign trusts and foreign estates.
(d) Examples.
(e) Effective/applicability dates.
§ 1.6038D-4 Information required to be reported.
(a) Required information.
(b) Effective/applicability dates.
§ 1.6038D-5 Valuation guidelines.
(a) Fair market value.
(b) Valuation of assets.
(1) Maximum value.
(2) U.S. dollars.
(3) Asset with no positive value.
(c) Foreign currency conversion.
(1) In general.
(2) Other publicly available exchange rate.
(3) Currency exchange rate.
(4) Determination date.
(d) Financial accounts.
(e) Asset held in a financial account.
(f) Other specified foreign financial assets.
(1) General rule.
(2) Interests in trusts that are specified foreign financial assets.
(i) Maximum value.
(ii) Reporting threshold.
(3) Interests in estates, pension plans, and deferred compensation plans.
(i) Maximum value.
(ii) Reporting threshold.
(g) Effective/applicability dates.
§ 1.6038D-6 Specified domestic entities.
(a) Specified domestic entity.
(b) Corporations and partnerships.
(1) Formed or availed of.
(2) Closely held.
(i) Domestic corporation.
(ii) Domestic partnership.
(iii) Constructive ownership.
(3) Determination of passive income and assets.
(i) Definition of passive income.
(ii) Exception from passive income treatment for dealers.
(iii) Related entities.
(4) Examples.
(c) Domestic trusts.
(d) Excepted domestic entities.
(1) Certain persons described in section 1473(3).
(2) Certain domestic trusts.
(3) Domestic trusts owned by one or more specified persons.
(e) Effective/applicability dates.
§ 1.6038D-7 Exceptions from the reporting of certain assets under section 6038D.
(a) Elimination of duplicative reporting of assets.
(1) In general.
(2) Foreign grantor trusts.
(3) Joint Form 5471 or Form 8865 filing.
(b) Owner of certain trusts.
(c) Special rules for bona fide residents of a U.S. possession.
(d) Effective/applicability dates.
§ 1.6038D-8 Penalties for failure to disclose.
(a) In general.
(b) Married specified individuals filing a joint annual return.
(c) Increase in penalty.
(d) Presumption of aggregate value.
(e) Reasonable cause exception.
(1) In general.
(2) Affirmative showing required.
(3) Facts and circumstances taken into account.
(f) Penalties for underpayments attributable to undisclosed foreign financial assets.
(1) Accuracy related penalty.
(2) Criminal penalties.
(g) Effective/applicability dates.