Individuals who are required to file FinCEN form 114 are U.S. persons, which include U.S. citizens, resident aliens, trusts, estates, and domestic entities that have an interest in foreign financial accounts and meet the reporting threshold. This includes residents and resident aliens of U.S. territories and U.S. territory entities. The threshold is a value of $10,000 or more during the calendar year. If you are required to report, you must report the maximum value of the financial account. To make this determination you must determine the maximum value using periodic account statements. Then you must covert this figure to U.S. dollars using the end of the year exchange rates and report the figure in U.S. dollars. As of 2014 the report must be electronically filed through FinCEN’s website by June 30, and no extensions are given. The FBAR does not get filed with the federal income tax return.
There are some exemptions to the filing requirement. You do not have to report an account held in a U.S. branch of a foreign bank. Foreign stock or securities which are not held in a financial account do not have to be reported. Foreign partnership interests are not subject to reporting. Domestic mutual funds that invest in foreign stocks or securities, foreign hedge funds, and private equity funds are also exempt. If owned directly, personal property, such as jewelry and art, real estate, currency, and precious metals held abroad are all exempt.
For the taxpayer who is still reading after the grueling determinations under the two parts of 7a, 7b of section III is a softball question. This question is actually straight forward if you figured out the answer to question 7a line 2. If you have to file FinCEN 114, you are required to divulge the name of the country in which the financial account or other holding is located. A taxpayer whose primary goal is other than to hide offshore accounts should be able to complete this question simply.
If you received a distribution from, created, or transferred money into a foreign trust, the IRS wants to know. They also want to know if you received more than $100,000 in gifts from an individual or foreign estate, or $15,102 from a foreign corporation or partnership. If you answer yes to this question, you must then determine if you need to file an IRS form 3520. This question is somewhat deceptively simple unless you have generous relatives who reside outside of the United States.
 The Bank Secrecy Act of 1970 31 CFR 1010.350
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