I just read through the filing instructions for Form 8938 (Specific Foreign Asset Reporting) and the instruction for valuing interests in foreign estates, foreign pension plans, and foreign deferred compensation plans, reads:

".......... the maximum value of your beneficial interest is the fair market value of your interest in the assets of the estate, pension plan or deferred compensation plan as the last day of the tax year. If you do not know or have reason know based on readily accessible information the fair market value as of the last day of the tax year, the maximum value is the fair market value, determined as of the last day of the tax year, of the cash and other property distributed during the tax year to you as a beneficiary or participant. If you received no distributions during the tax year and do not know or have reason to know based on readily accessible information the fair market value of your interest as of the last day of the tax year, use a value of zero as the maximum value of the organized under the laws of the U.S. asset."

It's so confusing.....am I correct in my understanding that:
1) if you don't know the maximum value, report it
2) if you don't know the MV, use the MV of cash and other property distributed during the tax year
3) and if you have neither 1) nor 2) above, use a zero as your MV.

I'm just so frustrated, worn out and stressed out. I have never felt so helpless....I mean helpless ....... as I did these last several weeks. (One accounting firm I saw on the internet quoted ($175-$450) for preparing form 8938 (Specified Foreign Asset Reporting) and this is addition to the $350-$700 for 1040 for a married couple, and charges for other forms such as form 5471, 8621.....

Thanks.

Sorry Folks,

1) above should read: If you KNOW the maximum value, report it

Thanks

Don't make these things any more complicated than they need to be.

Preparation of a 1040 is expensive because most people who have their tax returns prepared are looking to the preparer to take advantage of all possible deductions, loopholes and quirks of the law to reduce their taxes to the minimum legal amount.

Filing from overseas, you don't need to take all the deductions if you're already excluding your salary income via form 2555.

For the additional forms required for reporting "overseas financial accounts" read the instructions carefully and check for filing thresholds and definitions of what exactly they want you to report. Remember that these are reporting forms - not income tax forms (for the most part). They are looking for you to disclose your ownership of particular sorts of assets that may produce income you should be reporting on your income tax returns.

If you don't have a statement or other document that gives you a precise figure for the valuation, make a good faith estimate and document how you arrived at that figure (or what makes you believe you fulfill the requirement that allows you to report a 0 value). Keep your estimation calculation with the copy of your returns that you file. If the question comes up, you can explain what you did - and at the very least, you disclosed your interest in the account or asset.

Contrary to popular belief, the IRS isn't looking to swoop down on those who make minor mistakes in crunching the numbers (unless, of course, the "mistakes" are made by paid tax preparers, who are supposed to know better). It's the failure to disclose and/or the willful evasion of making a good faith effort that will land you in big trouble.
Cheers,
Bev