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Specified individual

The Form 8938 instructions use specified individual for several categories of people, including U.S. citizens.

Who the term covers

The IRS instructions for Form 8938 describe a specified individual as a U.S. citizen, certain resident aliens, and certain nonresident aliens. A U.S. citizen falls within the definition; the other categories depend on tax status or a specific election or residence connection.[1]

For resident aliens, the instructions point to the green card test or substantial presence test for U.S. tax purposes. They also include a nonresident alien who elects resident alien treatment to file a joint income tax return, and a nonresident alien who is a bona fide resident of American Samoa or Puerto Rico.[1]

The term sits within the broader label specified person. In the instructions, a specified person means either a specified individual or a specified domestic entity. The latter category includes certain domestic corporations, partnerships, and trusts, so the labels identify different types of filers or related persons.[1]

How it affects Form 8938

Specified individual status is one part of the Form 8938 framework. For an individual who meets the applicable threshold and has no exception, the instructions direct Form 8938 filing with the income tax return. The applicable threshold depends on marital and filing status and whether the taxpayer lives in the United States or abroad.[1]

For a U.S. citizen living in the United States, the threshold varies by filing situation. An unmarried person, or a married person filing separately, meets it when specified foreign financial assets exceed $50,000 at year end or $75,000 at any time. For spouses filing jointly, the corresponding amounts are $100,000 and $150,000.[1]

The instructions also set higher thresholds for taxpayers living abroad who meet a presence test. A U.S. citizen qualifies for that test through an uninterrupted bona fide residence in a foreign country covering an entire tax year, or through presence in foreign countries for at least 330 full days in a 12-month period ending in the reported tax year.[1]

A partial-year rule limits the reporting period when an individual meets the definition for only part of the tax year. For a dual resident taxpayer, the instructions also describe limited Form 8938 reporting exceptions for a period reported on Form 1040-NR or on a schedule to Form 1040 or 1040-SR, subject to specified filing conditions and Form 8833.[1]

The instructions connect this label to the valuation of jointly owned assets. A joint return filed by spouses uses the jointly owned asset's value once in calculating their combined total. When specified-individual spouses file separate returns, each includes half of the jointly owned asset's value for the threshold calculation.[1]

Assets reported on certain other forms still count toward the specified individual's reporting threshold. The instructions name Forms 3520, 3520-A, 5471, 8621, and 8865. If all specified foreign financial assets are reported on one or more of those forms as described in the instructions, Form 8938 reporting is limited to identifying information and Part IV; if only some assets are reported on those forms, the remaining assets must be reported on Form 8938.[1]

The instructions distinguish an individual filer from specified domestic entities in how Form 8938 identifies the filer. An individual checks the specified-individual filer box. In contrast, an entity's classification may depend on ownership by a specified individual, and a domestic trust's classification can depend on whether a specified person is a current beneficiary.[1]

Specified person

Specified person is a category in the Form 8938 instructions that includes either a specified individual or a specified domestic entity. For a U.S. citizen, the instructions use the term when describing who generally files Form 8938, subject to exceptions and reporting thresholds.[1]

A specified individual includes a U.S. citizen, certain resident aliens, and some nonresident aliens, with separate rules for particular circumstances. A specified domestic entity is a distinct branch of the definition. It can include a closely held domestic corporation or partnership meeting a passive income or asset test, or a domestic trust with a specified person as a current beneficiary.[1]

The filing rule applies when a specified person has an interest in specified foreign financial assets whose value exceeds the applicable threshold. A person who is not required to file an income tax return for the tax year does not have to file Form 8938.[1] A domestic corporation is closely held under this rule if, on the last day of its tax year, a specified individual directly, indirectly, or constructively owns at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of its stock. A domestic partnership is closely held under this rule if, on the last day of its tax year, a specified individual directly, indirectly, or constructively holds at least 80 percent of its capital or profits interest.[1]

A domestic trust can qualify when a specified person is a current beneficiary, including someone entitled to or potentially able to receive a distribution during the tax year, and certain holders of a general power of appointment.

For a specified person who is a beneficiary of a foreign trust, the Form 8938 instructions refer to Part III of Form 3520 and its instructions. Other listed forms can affect duplicate reporting of assets on Form 8938.[1]

Questions and answers

Does the term include every U.S. citizen?

The Form 8938 instructions include a U.S. citizen in the specified-individual definition. Whether Form 8938 filing applies also depends on the reporting threshold and whether an exception applies.[1]

Which noncitizens can be specified individuals?

The definition includes resident aliens for any part of the tax year, subject to the reporting-period rule. It also includes certain nonresident aliens who elect resident alien treatment for a joint return or are bona fide residents of American Samoa or Puerto Rico.[1]

What determines an individual's Form 8938 threshold?

The instructions say the threshold depends on marital status, whether a joint federal income tax return is filed, and whether the individual lives inside or outside the United States. Threshold amounts also depend on whether asset value is measured at year end or at any time during the tax year.[1]

Does a partial-year status change the reporting period?

Yes. If a person is a specified individual for less than the entire tax year, the Form 8938 reporting period is the part of the year in which that status applies.[1]

Do assets on other forms count toward the threshold?

Yes. The instructions say the value of assets reported on Forms 3520, 3520-A, 5471, 8621, and 8865 is included when determining whether the specified individual meets the Form 8938 threshold.[1]

How does specified individual relate to specified person?

Specified individual is one of two categories within specified person. The other category is specified domestic entity, which covers certain domestic organizations under the instructions' definitions.[1]

  • Reporting threshold for Form 8938: The Form 8938 instructions set asset value thresholds for specified individuals based on marital status, filing status, and qualifying residence abroad.
  • Financial interest in an account: FBAR rules define financial interest through account ownership or relationships to the legal title holder. A U.S. person named on an account has an interest.
  • Maximum account value: The Form 8938 instructions define maximum account value as a financial account's highest value during the tax year, based generally on fair market value.

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Sources and data notes
  1. Internal Revenue Service, Instructions for Form 8938. https://www.irs.gov/instructions/i8938. Retrieved .
  2. FinCEN, Report foreign bank and financial accounts. https://www.fincen.gov/report-foreign-bank-and-financial-accounts. Retrieved .
  3. U.S. Government, 31 CFR 1010.350. https://ecfr.io/Title-31/Section-1010.350. Retrieved .
  4. Internal Revenue Service, FATCA summary. https://www.irs.gov/businesses/corporations/summary-of-key-fatca-provisions. Retrieved .
  5. U.S. Department of the Treasury, FATCA: agreements by jurisdiction. https://home.treasury.gov/policy-issues/tax-policy/foreign-account-tax-compliance-act. Retrieved .
  6. Internal Revenue Service, 26 CFR 1.1471-4. https://www.irs.gov/instructions/iw9. Retrieved .

Dates in this block record when each source was read for this page.