Form 8938 – savings account interest from foreign savings account – Money & ServicesReport
Greetings. I already report a foreign savings account on the FBAR but I am not sure where to report interest from this account. Do I need to include this account in my form 8938 as well? What form should I use to report the interest? I am especially confused because the interest is already taxed in my home country.
You do NOT report interest on the FBAR, as the FBAR (Form Form TD F 90-22.1) is an information return on which you report the highest BALANCE in the account in the calendar year.
Interest earned is reported on your federal INCOME tax return on Schedule B. You can claim the Foreign Tax Credit for the foreign tax on the interest by submitting Form 1116 fpr passive income.
If your accounts exceed minimums set by the IRS, then, yes, you must include the accounts on Form 8938 (which IS submitted WITH the tax return) AND on your 2011 FBAR.
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