FBAR and Mortgage

Hi Everyone.

I am American and have had a fairly low income (around $30-35,000) while living in the UK for the past few years. My tax returns have been fairly straightforward, but in 2016, my wife and I bought an apartment and borrowed 90% from a bank to pay for it.

Must I report my mortgage account on my FBAR?

Also, I received some money from family in the states to use towards the purchase. If my account showed over $10,000 at any point in time, does that mean I must fill out an FBAR?

And yes, I am a little late to the party and realise that the filing deadline was 15 April 2017 (not the expat-deadline for filing taxes of 15 June 2017).

Any advice or links to other forum posts which address this issue would be most appreciated.

Best,
Gustavo

Hi Gustavo,

No, you don't report the mortgage. The FBAR is for assets. If your total assets in whatever many accounts you have in total, ever goes above $10,000 during the year, then you need to report the lot.

IRS website is best for info!

newcomer link: https://www.irs.gov/uac/newsroom/taxpayers-with-foreign-assets-may-have-fbar-and-fatca-filing-requirements-in-june [nonactive]

Agreed with previous post, but you haven't missed the due date for 2017. Our leaders, in their infinite wisdom set the due date same as tax day, but then give everyone an automatic extension. Why not just make the deadline October, I don't know!  Anyway, here is the announcement:

https://www.fincen.gov/news/news-releases/new-due-date-fbars-0

You could claim the mortgage interest you paid as a deduction; the FBAR is automatically extended until 16 October 2017.

You don't have to report the mortgage on an FBAR, however if your family in the States gave you over $10,000 for your deposit and it was in a UK bank account that you or your wife control even temporarily before you paid for the apartment (or if combined with any other UK bank or investment accounts you may have, it meant that you had a total of over $10,000 in UK financial accounts), you would have to file an FBAR to report all your UK bank and investment accounts. You have until October 15th to do this though this year.

[link removed]

Also worth noting that you don't have to file form 8938 if your property is worth over $200,000, as property is considered a tangible asset and so doesn't qualify.

A mistake appears to have crept into the previous poster's comment. The correct filing date for the 2016 FBAR is 16 October 2017 (not 15 October 2017):
https://www.irs.gov/uac/rda-2017-01-11-2016-fincen-form-114

If it is required, an FBAR is quite straightforward and should not need a professional to help.

jj2201, I am curious to know, what exactly is your affiliation with the company that you mention, link to, or invite readers to PM you about, in almost every single one of your posts?

Thank you everyone for your very helpful replies. This forum is such a great resource. Nothing brings out the best in the collective human spirit like the shared frustrations of US tax filing.

I definitely need to file an FBAR, and I agree, it looks fairly straight forward. I am using an online free file service I found via the IRS website (taxact.com - I have no affiliation with them by the way). On my salary, I will not be paying any taxes so there is no point in figure out what my deductions are, right?

If I can ask 2 more questions:

(1) My naive view of filing US taxes is to simply look at how much I am earning from employment wages and file accordingly (I have no other investments and my wife is foreign with no tax number). When will it matter for tax purposes the fact that I own a house in England? When I sell it?

(2) Do I still need to file a state return?

A few things:
1. If you belong in a UK pension plan the employer's contributions are considered taxable income.
2. If you repay any of the capital borrowed on the mortgage, you will need to recognise a large taxable foreign currency gain because of the sharp fall in Sterling after June 2016.
3. You may want to optimise excess foreign tax credit carryovers rather than elect to claim the foreign earned income exclusion.

Thanks, Guya. That's helpful.