Am I ever in an unfortunate position. I’ve just now found out that I should have been filing returns for the last two or three years, (or at least schedule Bs) just because our joint bank account swelled temporarily and I needed to file FBARs. I’ve had little or no income, and therefore was below the threshold for filing (married filing separately), but my name is on joint accounts.
But then as I was looking over our records I had an unsettling revelation. From September 2003 to February 2009 we had some unit trusts. Somehow I'd had the idea that only my UKC husband’s name was on them, but – gulp! – I am listed as “second holder.”
I’ve found that the IRS taxes these heavily – but ours didn’t gain, it lost. We were drawing off interest monthly, but the units lost value and we cashed out at a loss (23,000 went down to 17,000). I remember at the time that if we added back on the total interest over the 5 years, we netted about a hundred pounds. But I suppose they might look on the drawn-off interest as "gain."
Even more unfortunate, I can’t find any yearly statements for these accounts (and can’t imagine why). I only have a general estimate of what they were doing during those years.
Filing the 1040s and FBARs from 2010 and 2011 won’t be so difficult, but does anyone have any idea what to do about these? 2004 was the last year I filed. A few days ago I thought it would all be okay, and now I feel like I’m sinking in a soup of IRS sludge.
