FATCA and the Form 8938 for Crypto Taxes

What is the FATCA and Form 8938?

The Foreign Account Tax Compliance Act (FATCA) necessitates that certain taxpayers report their financial asset holdings outside of the United States. If you are over the FATCA value threshold with crypto, you may want to report your crypto asset holdings on the Form 8938. 

The 8938 is similar to the FBAR in that you report balances of your foreign financial assets, but they are separate forms with different thresholds, and you report the 8938 on your tax return for the IRS while the FBAR is e-filed separately with FinCEN. You may want to file a crypto 8938 if you have significant values of crypto held on foreign exchanges. 

When you need to file IRS Form 8938 for FATCA

The FATCA thresholds are as follows for taxpayers living in the United States:

  • Single filers: foreign assets worth more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year

  • Married filing jointly: foreign assets worth more than $100,000 on the last day of the tax year or more than 150,000 at any time during the tax year

  • Married filing separately: foreign assets more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year

These thresholds are different for taxpayers living abroad. Read the IRS’s summary of FATCA reporting here for more information. 

Note that if you file a Form 8938, you still need to file an FBAR as well, for which the threshold is over $10,000 in foreign assets. An important distinction is that the FATCA 8938 is included with your income tax return, while the FBAR is a separate filing with FinCEN and is thus not part of your tax return. 

You are required to determine the value of your foreign assets to figure out the threshold and to report your amounts . Our FBAR report can provide you with these values for the FATCA. For our full filing clients, we handle the filing of the 8938 if applicable. 

Is the Form 8938 really required for crypto?

The IRS has not given specific guidance regarding whether the FATCA applies to crypto held with foreign financial entities like cryptocurrency exchanges, but there’s no drawback to filing just in case. Thus, many are adhering to the FATCA requirement for crypto in case it’s later said that crypto holders are required to file the 8938. 

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