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Specified Domestic Entity Form 8938 Filing Threshold | FATCA Lawyer

The Specified Domestic Entity Form 8938 filing threshold is likely to be very easily satisfied by the majority of Specified Domestic Entities. With the major tax return filing deadlines just two or three months away (depending on whether an entity is a corporation, a partnership or a trust), every Specified Domestic Entity must assess whether it is required to file FATCA Form 8938. Failure to do so may result in imposition of Form 8938 penalties by the IRS.

Specified Domestic Entity Form 8938 Filing Threshold

For tax years beginning after December 31, 2015, a Specified Domestic Entity must file Form 8938 if the total value of its Specified Foreign Financial Assets exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year. This is an incredibly low Specified Domestic Entity Form 8938 filing threshold that pretty much means that virtually all Specified Domestic Entities will have to file a Form 8938.

Transition Years Are Most Dangerous

Transition tax years 2016, 2017 and 2018 are likely to be the most dangerous for Specified Domestic Entities. Since the Specified Domestic Entity Form 8938 filing threshold is very low and the awareness of the Specified Domestic Entity Form 8938 filing obligation is limited to a small number of specialized tax professionals, there can be no doubt that many Specified Domestic Entities will fail to comply with their Form 8938 filing obligations and may face steep Form 8938 penalties.

Contact Sherayzen Law Office for Help with the Specified Domestic Entity Form 8938 Filing Obligations

If your business or a trust is classified as a Specified Domestic Entity and your entity failed to file FATCA Form 8938, you need to contact Sherayzen Law Office for professional help. Our international tax law firm specializes in helping business and individuals with their US international tax compliance requirements, including Form 8938, and with their offshore voluntary disclosures involving a Form 8938.

Contact Us today to Schedule Your Confidential Consultation!

Specified Domestic Entity: Formed or Availed Of | FATCA Lawyer & Attorney

We are continuing our series of articles on the Specified Domestic Entity definition. In previous articles, I already explained what entities are considered to be domestic and what kind of foreign assets are included in the Specified Foreign Financial Assets. In this article, I would like to introduce the key part of the definition of a Specified Domestic Entity: formed or availed of.

Due to the fact that there is a significant difference in treatment of trusts versus business entities (partnerships and corporations), I will analyze these two types of entities separately. In this article, I will focus solely on introducing the concept of Formed or Availed Of as it applies to partnerships and corporations.

Formed or Availed Of: Context

It is first useful the remember the context in which the clause “Formed or Availed Of” arises.  Treas. Reg. §1.6038D-6(a) defines a Specified Domestic Entity as “a domestic corporation, a domestic partnership, or a trust described in 26 U.S.C. §7701(a)(30)(E), if such corporation, partnership, or trust is formed or availed of for purposes of holding, directly or indirectly, specified foreign financial assets” (italics added).

Thus, the concept of “formed or availed of” is the key part to the definition of a Specified Domestic Entity.

Formed or Availed Of: Main Legal Test

It may seem to a person unfamiliar with Form 8938 that Formed or Availed Of concept implies some sort of a factual finding of intent. This first impression is not correct.

On the contrary, Formed or Availed Of concept has nothing in common with the actual intent of the parties who formed the business entity. Rather, the IRS established a very specific legal test to determine if a business entity is formed or availed of for purposes holding specified foreign financial assets.

The Formed or Availed Of Test is in reality a combination of two legal tests found in Treas. Reg. §1.6038D-6(b). An entity is considered to be formed or availed of for purposes of holding specified foreign financial assets if: (1) the corporation or the partnership is closely held (the “Closely-Held Test”), AND (2) the corporation or the partnership meets the Passive Income or Passive Assets threshold requirement (the “Passive Test”). See Treas. Reg. §1.6038D-6(b). Please, note that both tests needs to be satisfied in order for a business entity to be considered as formed or availed of for purposes of holding specified foreign financial assets.

In future articles, I will explore the Closely-Held Test and the Passive Test in more detail.

Contact Sherayzen Law Office for Professional Help Concerning US International Tax Compliance Requirements for Owners of US and Foreign Businesses

If you are an owner of a foreign business or a US domestic business which owns assets overseas, you should contact Sherayzen Law Office for professional help concerning relevant US tax compliance requirements. We have helped US business owners around the world, and We can Help You!

Contact Us Today to Schedule Your Confidential Consultation!

2015 Form 8938 and FBAR Currency Conversion Rates

Currency conversion is a critical part of preparing 2015 FBAR and Form 8938. This is why 2015 Form 8938 and FBAR Currency Conversion Rates are so important.

The 2015 Form 8938 and FBAR Currency Conversion Rates are the December 31, 2015 rates officially published by the U.S. Department of Treasury (they are called “Treasury’s Financial Management Service rates” or the “FMS rates”). Recently, the Treasury Department published the FMS rates for December 31, 2015.

The 2015 Form 8938 and FBAR Currency Conversion Rates also serve for other purposes beyond the preparation of the 2015 FBAR and Form 8938.

The instructions to both forms, the FBAR and Form 8938, require (in case of Form 8938, this is the default choice) to use the 2015 Form 8938 and FBAR Currency Conversion Rates published by the Treasury Department.

For this reason, the 2015 Form 8938 and FBAR Currency Conversion Rates are very important to international tax lawyers and international tax accountants. For your convenience, Sherayzen Law Office provides the table below of the official 2015 Form 8938 and FBAR Currency Conversion Rates (keep in mind, you still need to refer to the official website for any updates).

Country Currency Foreign Currency to $1.00
Afghanistan Afghani 67.9000
Albania Lek 125.5400
Algeria Dinar 106.8780
Angola Kwanza 145.0000
Antigua-Barbuda East Caribbean Dollar 2.7000
Argentina Peso 12.9460
Armenia Dram 484.0000
Australia Dollar 1.3680
Austria Euro 0.9190
Azerbaijan Manat 1.6200
Bahamas Dollar 1.0000
Bahrain Dinar 0.3770
Bangladesh Taka 79.0000
Barbados Dollar 2.0200
Belarus Ruble 18555.0000
Belgium Euro 0.9190
Belize Dollar 2.0000
Benin CFA Franc 602.7900
Bermuda Dollar 1.0000
Bolivia Boliviano 6.8600
Bosnia-Hercegovina Marka 1.7970
Botswana Pula 11.2360
Brazil Real 3.9590
Brunei Dollar 1.4160
Bulgaria Lev 1.7970
Burkina Faso CFA Franc 602.7900
Burma-Myanmar Kyat 1311.0000
Burundi Franc 1600.0000
Cambodia (Khmer) Riel 4103.0000
Cameroon CFA Franc 602.6800
Canada Dollar 1.3860
Cape Verde Escudo 101.2220
Cayman Islands Dollar 1.0000
Central African Republic CFA Franc 602.6800
Chad CFA Franc 602.6800
Chile Peso 709.9800
China Renminbi 6.4920
Colombia Peso 3169.2800
Comoros Franc 435.3000
Congo CFA Franc 602.6800
Congo, Dem. Rep Congolese Franc 920.0000
Costa Rica Colon 531.9400
Cote D’Ivoire CFA Franc 602.7900
Croatia Kuna 6.8200
Cuba Peso 1.0000
Cyprus Euro 0.9190
Czech Republic Koruna 24.2030
Denmark Krone 6.8560
Djibouti Franc 177.0000
Dominican Republic Peso 45.4000
Ecuador Dolares 1.0000
Egypt Pound 7.8300
El Salvador Dolares 1.0000
Equatorial Guinea CFA Franc 602.6800
Eritrea Nakfa 15.0000
Estonia Euro 0.9190
Ethiopia Birr 21.0700
Euro Zone Euro 0.9190
Fiji Dollar 2.1250
Finland Euro 0.9190
France Euro 0.9190
Gabon CFA Franc 602.6800
Gambia Dalasi 40.0000
Georgia Lari 2.4000
Germany FRG Euro 0.9190
Ghana Cedi 3.8200
Greece Euro 0.9190
Grenada East Carribean Dollar 2.7000
Guatemala Quentzel 7.6320
Guinea Franc 8004.0000
Guinea Bissau CFA Franc 602.7900
Guyana Dollar 202.0000
Haiti Gourde 56.5840
Honduras Lempira 22.3000
Hong Kong Dollar 7.7500
Hungary Forint 289.9800
Iceland Krona 129.6700
India Rupee 66.1000
Indonesia Rupiah 13550.0000
Iran Rial 29830.0000
Iraq Dinar 1166.0000
Ireland Euro 0.9190
Israel Shekel 3.8990
Italy Euro 0.9190
Jamaica Dollar 118.7000
Japan Yen 120.4200
Jerusalem Shekel 3.8990
Jordan Dinar 0.7080
Kazakhstan Tenge 339.5000
Kenya Shilling 102.2000
Korea Won 1175.9000
Kuwait Dinar 0.3030
Kyrgyzstan Som 75.5000
Laos Kip 8128.0000
Latvia Euro 0.9190
Lebanon Pound 1500.0000
Lesotho South African Rand 15.5560
Liberia Dollar 88.0000
Libya Dinar 1.3890
Lithuania Euro 0.9190
Luxembourg Euro 0.9190
Macao Mop 8.0000
Macedonia FYROM Denar 56.2900
Madagascar Aria 3196.0000
Malawi Kwacha 662.0000
Malaysia Ringgit 4.2900
Mali CFA Franc 602.7900
Malta Euro 0.9190
Marshall Islands Dollar 1.0000
Martinique Euro 0.9190
Mauritania Ouguiya 330.0000
Mauritius Rupee 35.8000
Mexico New Peso 17.3620
Micronesia Dollar 1.0000
Moldova Leu 19.6000
Mongolia Tugrik 1967.0500
Montenegro Euro 0.9190
Morocco Dirham 9.8740
Mozambique Metical 45.50000
Namibia Dollar 15.5560
Nepal Rupee 105.7500
Netherlands Euro 0.9190
Netherlands Antilles Guilder 1.7800
New Zealand Dollar 1.4610
Nicaragua Cordoba 27.8600
Niger CFA Franc 602.7900
Nigeria Naira 198.9000
Norway Krone 8.8290
Oman Rial 0.3850
Pakistan Rupee 104.7000
Palau Dollar 1.0000
Panama Balboa 1.0000
Papua New Guinea Kina 2.9410
Paraguay Guarani 5750.0000
Peru Nuevo Sol 3.3940
Philippines Peso 46.8360
Poland Zloty 3.9170
Portugal Euro 0.9190
Qatar Riyal 3.6410
Romania Leu 4.1540
Russia Ruble 73.7950
Rwanda Franc 742.3300
Sao Tome & Principe Dobras 22350.3086
Saudi Arabia Riyal 3.7500
Senegal CFA Franc 602.7900
Serbia Dinar 111.2500
Seychelles Rupee 13.0440
Sierra Leone Leone 5750.0000
Singapore Dollar 1.4160
Slovak Republic Euro 0.9190
Slovenia Euro 0.9190
Solomon Islands Dollar 8.0710
South Africa Rand 15.5560
South Sudananese Pound 18.5500
Spain Euro 0.9190
Sri Lanka Rupee 144.1500
St Lucia East Carribean Dollar 2.7000
Sudan Pound 6.6000
Suriname Guilder 4.0000
Swaziland Lilangeni 15.5560
Sweden Krona 8.4430
Switzerland Franc 0.9940
Syria Pound 219.6500
Taiwan Dollar 32.8740
Tajikistan Somoni 7.0000
Tanzania Shilling 2155.0000
Thailand Baht 36.0500
Timor-Leste Dili 1.0000
Togo CFA Franc 602.7900
Tonga Pa’anga 2.1270
Trinidad & Tobago Dollar 6.4040
Tunisia Dinar 2.0330
Turkey Lira 2.9180
Turkmenistan Manat 3.4910
Uganda Shilling 3378.0000
Ukraine Hryvnia 23.9520
United Arab Emirates Dirham 3.6730
United Kingdom Pound Sterling 0.6750
Uruguay New Peso 29.8900
Uzbekistan Som 2857.0000
Vanuatu Vatu 108.5500
Venezuela New Bolivar 6.3000
Vietnam Dong 22480.0000
Western Samoa Tala 2.5020
Yemen Rial 214.5000
Zambia Kwacha (New) 10.9900
Zambia Kwacha 5455.0000
Zimbabwe Dollar 1.0000

1. Lesotho’s loti is pegged to South African Rand 1:1 basis
2. Macao is also spelled Macau: currency is Macanese pataka
3. Macedonia: due to the conflict over name with Greece, the official name if FYROM – Former Yugoslav Republic of Macedonia.
4. Please, refer to the Treasury’s website for amendments regarding any reportable transactions in January, February, and March of 2015.