How to report foreign assets to IRS: Form 8938 vs 3520 vs 5471 vs 8865

Written by  Mel Whitney, EA

Last updated Apr 23, 2026

US citizens and green card holders living abroad may need to file up to eight separate IRS and Treasury forms each year to report foreign assets held offshore, including accounts, entities, trusts, and gifts. Foreign asset reporting is separate from paying US tax, and most expats owe little or nothing federally but still have to file these disclosures.

Key takeaways

• FBAR (FinCEN Form 114) is required once your combined foreign financial accounts cross $10,000 at any point in the year.
• Form 8938 thresholds range from $50,000 to $600,000, depending on filing status and whether you live in the US or abroad, under the FATCA framework governing US foreign asset disclosure to the IRS.
• Forms 3520, 3520-A, 5471, 8865, 8621, and 926 cover foreign trusts, gifts, corporations, partnerships, PFICs, and transfers to foreign entities, with overlap rules that matter when the same asset triggers more than one foreign asset disclosure.
• Missed filings can often be corrected through the Streamlined Filing Compliance Procedures, with 0% penalties for non-willful expats abroad and a 5% penalty for US residents.

This guide walks through each form in turn: who files it, the dollar threshold that triggers it, how it overlaps with other forms, what gets reported elsewhere on your Form 1040, and what to do if you've missed filings in prior years.

What counts as foreign asset reporting for the IRS

Foreign asset reporting for the IRS covers six main categories: foreign accounts, directly held foreign securities, foreign entity interests, foreign trusts, large foreign gifts, and certain foreign pensions and insurance products. The specific form you file depends on the asset type, not just its dollar value.

Here's how each category maps to the forms you'll actually need to file under foreign assets disclosure rules:

• Foreign bank and brokerage accounts held at foreign financial institutions are reported on FBAR (FinCEN Form 114), and often on Form 8938 as well.
• Foreign stocks, bonds, and other securities held directly rather than through a financial account are reportable on Form 8938 but not on FBAR.
• Interests in foreign corporations and foreign partnerships typically trigger Form 5471 or Form 8865 in addition to Form 8938.
• Beneficial interests in foreign trusts and transactions with foreign trusts are reported on Form 3520 and Form 3520-A.
• Large foreign gifts or inheritances over $100,000 from nonresident individuals or estates are reported on Form 3520.
• Foreign pensions, deferred compensation plans, and foreign-issued insurance or annuity contracts with cash-surrender value are reportable on Form 8938.

Direct foreign real estate is the most common exception. A personal residence or rental property owned in your own name is not a specified foreign financial asset and does not go on Form 8938.

If the property is held through a foreign corporation, partnership, or trust, though, the entity interest itself becomes reportable. The value of the underlying real estate is folded into the entity's value rather than shown separately on any form.

Other exclusions matter for how to report foreign assets correctly: foreign currency held in cash, directly held precious metals and collectibles, and foreign Social Security-equivalent benefits are all outside the Form 8938 universe. Some of these can still affect whether specific accounts qualify for FATCA exemptions elsewhere in your return.

Quick decision table: which form do you file

The IRS list of foreign asset disclosure forms depends on what you own or receive, and most expats only trigger one or two forms per year. Each scenario below maps to a primary form, with details on where it's filed and whether it overlaps with FBAR or Form 8938.

The main foreign-asset reporting forms are FBAR, Form 8938, Forms 3520 and 3520-A, Form 5471, Form 8865, and Form 8621 – which one applies depends on the asset or transaction, and a single asset can trigger more than one form at once.

How overlap works in practice: If an asset is already reported on a timely filed Form 3520, 3520-A, 5471, 8621, or 8865, you generally do not duplicate the detailed asset listing on Form 8938. Instead, you identify the other form on Part IV of Form 8938 and still count the asset’s value when testing whether you meet the Form 8938 filing threshold. FBAR is separate and is not replaced by Form 8938 or the entity forms.

The dollar thresholds above apply to the 2025 tax year, filed in 2026. For tax year 2025, the foreign corporation or partnership threshold is $20,116, while the $100,000 threshold for nonresident individuals or estates remains unchanged.

For tax year 2026, the foreign corporation or foreign partnership gift-reporting threshold is $20,573, as shown in the IRS Form 3520 guidance; that update applies to the next filing season.

Form 8938: when you report foreign financial assets under FATCA

Form 8938 handles the disclosure of foreign assets in income tax return filings under FATCA, attached to Form 1040, once your specified foreign financial assets exceed threshold amounts ranging from $50,000 to $600,000.

The thresholds depend on your filing status and whether you live in the US or abroad, and they have not been adjusted for inflation since the form was introduced in 2011.

Unlike FBAR, which only covers financial accounts, Form 8938 reaches a broader set of assets. It also includes pensions, ownership interests in foreign entities, and securities held directly rather than through an account.

Common expat triggers

The following four asset categories account for most Form 8938 filings by US expats:

• Foreign bank and savings accounts held at non-US financial institutions
• Foreign brokerage and investment accounts holding mutual funds, ETFs, or individual securities
• Foreign pensions and deferred compensation plans, other than foreign Social Security equivalents
• Ownership interests in foreign corporations, partnerships, trusts, and estates

When Form 8938 does not replace other forms

Form 8938 does not replace FBAR and does not substitute for other international information returns like Forms 3520, 3520-A, 5471, 8621, or 8865. Each form has its own filing trigger, and a single asset can land on multiple forms at the same time.

Form 8938 vs FBAR

FBAR and Form 8938 are the most commonly overlapping pair. They go to different agencies with different rules: FBAR is filed with FinCEN at the Treasury, while Form 8938 is filed with the IRS. The thresholds, asset scope, and penalty structures are all different.

The "reported elsewhere" rule

For the other forms, the Form 8938 instructions carve out a narrow exception. If you timely file Form 3520, Form 3520-A, Form 5471, Form 8621, or Form 8865 for a specific asset, you don't separately list that asset on Form 8938, but you must identify the other form on Part IV and still count the asset's value toward your Form 8938 threshold.

The common trap is assuming that filing Form 5471 for a foreign corporation lets you skip Form 8938 entirely. You still need Form 8938 if your aggregate specified foreign financial assets exceed the threshold; the "reported elsewhere" rule just saves you from listing the same asset twice.

Filing FBAR but unsure about Form 8938? We handle both under one FATCA review.

 

Learn more

Form 3520: foreign trusts, large foreign gifts, and inheritances

Form 3520 handles the disclosure of foreign assets received as gifts, bequests, or trust transactions, rather than serving as a general foreign-account reporting form. It's required only when you've had a specific transaction with a foreign trust or received a gift or bequest from a foreign person over the threshold: $100,000 from an individual or estate, or $20,116 from a foreign corporation or partnership for the 2025 tax year.

The form splits into two very different reporting universes. Foreign trust transactions cover Parts I through III, while foreign gifts and bequests are reported on Part IV.

Confusing the two is the most common mistake expats make when filing Form 3520.

When Form 3520 is triggered

Four situations require a US person to file Form 3520, and each one maps to a different part of the form.

Most expat filings fall into Part IV (foreign gifts and bequests over the threshold), while Parts I through III apply only when you have an actual transaction with or ownership of a foreign trust.

Form 3520 is filed separately from Form 1040 and mailed to the IRS service center in Ogden, Utah. It has the same deadline as Form 1040, including extensions, but it is never attached to the return.

Do you need Form 3520 for a foreign inheritance or gift?

You need Form 3520 if you receive more than $100,000 from a nonresident individual or foreign estate, or more than $20,116 from a foreign corporation or partnership during the 2025 calendar year.

The form is an information return only, and most ordinary foreign gifts and inheritances are not taxed as income. However, gifts or bequests from covered expatriates may be subject to tax under IRC section 2801.

Aggregation rule

Gifts from related foreign donors are combined for the $100,000 threshold. If you receive $60,000 from your foreign father and $50,000 from your foreign mother in the same year, you're over the threshold and must file, even though no single gift crossed it.

Foreign trust distributions are not gifts

A distribution from a foreign trust, even one that feels like an inheritance, is reported on Part III, not Part IV.

It may carry additional complexity around throwback taxation and accumulated distribution rules, which go beyond the scope of a simple foreign-gift filing.

2025 vs 2026 thresholds

The $100,000 threshold for gifts from foreign individuals or estates is statutory and does not change. For the 2026 tax year, the foreign corporation or partnership threshold rises to $20,573.

Form 5471: when foreign corporation ownership triggers reporting

Form 5471 is the foreign asset disclosure return for certain US officers, directors, and shareholders of foreign corporations, filed with Form 1040 once you meet one of five filer categories. The initial penalty is generally $10,000 per form per year, with continuation penalties that can bring the total to $60,000 per form.

The form gives the IRS financial visibility into foreign companies where US persons hold significant influence. That makes it one of the most complex international information returns, with up to 12 separate schedules depending on your category.

Who has to file

The core trigger is 10% ownership of a foreign corporation by vote or value. It also applies to officers or directors when another US person crosses that threshold.

If combined US ownership exceeds 50%, the corporation becomes a controlled foreign corporation (CFC). That adds Subpart F and GILTI reporting obligations on top of the base Form 5471 filing.

Why the form is its own beast

Schedule complexity sets Form 5471 apart from other forms used to report foreign financial assets. A Category 4 or 5 filer who controls a foreign corporation must complete income statements, balance sheets, earnings and profits tracking, and shareholder basis schedules.

A Category 2 officer or director filing because someone else crossed a 10% threshold may only need Schedule O. Same cover sheet, completely different filing effort.

Common expat situations that can trigger Form 5471

Form 5471 commonly catches US expats who don't think of themselves as foreign corporation owners. The filing obligation attaches to corporate structure and ownership percentage, not to how much money you've taken out of the business.

Four typical expat scenarios trigger Form 5471:

• You incorporated your consulting or freelance business abroad as an Ltd, GmbH, SARL, SL, or similar entity, and you own 10% or more.
• Your startup shares crossed the 10% vote or value threshold this year, including through dilution or acquisition.
• You hold an interest in a family-owned company overseas that meets the ownership or CFC thresholds.
• You own a dormant foreign corporation that still legally exists but conducts no business.

The "I didn't take any money out" misconception

Filing is triggered by ownership, officer or director status, or acquisition events, not by distributions. A profitable foreign corporation that reinvests every dollar still requires Form 5471 from its US owners.

Dormant corporations still file

A foreign corporation with no activity is not automatically exempt from Form 5471. Relief exists under Revenue Procedure 92-70, which allows a simplified one-page filing, but only if all eight dormancy conditions are met for the full tax year.

Those conditions include: no business conducted, no stock or asset transfers, gross income under $5,000, gross expenses under $5,000, total assets under $100,000, no distributions, and no accumulated earnings.

Form 8865: When a foreign partnership interest must be reported

Form 8865 is the foreign asset disclosure return for US persons with significant interests in foreign partnerships, attached to Form 1040 once you meet one of four filer categories. The penalty for missing it starts at $10,000 per partnership per year.

The form exists because foreign partnerships flow income and losses through to partners, unlike foreign corporations. The IRS needs visibility into the partnership's activities even when no distributions have been made.

Three distinct trigger types require Form 8865:

• Control of a foreign partnership (more than 50% ownership, Category 1)
• Transfers of property to a foreign partnership ($100,000 or more, or resulting in 10% ownership, Category 3)
• Acquisitions, dispositions, or changes in partnership interests that cross the 10% threshold (Category 4)

A Category 2 filer is the additional scenario: a 10% or greater interest in a foreign partnership that is controlled by US persons who each own 10% or more.

Form 8865 vs Form 5471: corporations versus partnerships

The two forms cover fundamentally different legal structures. Form 5471 reports ownership of foreign corporations (Ltd, GmbH, SARL, Inc), where the entity pays its own corporate tax.

Form 8865 reports ownership of foreign partnerships, where income and losses flow through to partners and are taxed at the partner level. Mixing up the two is a common filing error for expats with small foreign businesses.

Local entity classification determines which form applies, with possible check-the-box elections that can reclassify a foreign LLC or similar hybrid entity as either a corporation or partnership for US tax purposes.

Penalty structure differs from Form 5471

Category 1 and 2 penalties are $10,000 per partnership per year, with an additional $10,000 charges per 30-day period after IRS notice, capped at $50,000. Category 3 penalties can reach 10% of the fair market value of the contribution, up to $100,000, under the IRS international information reporting penalty rules.

Form 8938 vs 3520 vs 5471 vs 8865: how the forms overlap

The four forms are not interchangeable because each reports a different legal relationship: asset ownership for Form 8938, trust and gift events for Form 3520, corporation ownership for Form 5471, and partnership ownership for Form 8865.

A single asset can trigger more than one form at once, which is why foreign assets disclosure often requires filing two or three of these together.

Form 8938 is the most commonly overlapping form: it can coexist with Forms 3520, 5471, and 8865 when the underlying asset crosses the specified foreign financial asset threshold, with the other form taking primary responsibility for the asset's substantive reporting.

How overlap actually works in practice

Form 8938 uses a "reported elsewhere" exception that reduces duplication without eliminating the filing obligation.

If you timely file Form 3520, 3520-A, 5471, 8621, or 8865 for a specific asset, you identify that form on Part IV of Form 8938 rather than listing the asset twice.

You still need to file Form 8938 itself if your total specified foreign financial assets exceed the threshold, even when every single asset is already reported on another form.

FBAR is different. It never gets absorbed into another form and is always filed separately with FinCEN at Treasury, regardless of what's on Form 8938 or the entity forms.

Common overlap scenarios for expats

• You own 100% of a German GmbH holding a German brokerage account: Form 5471 for the GmbH, Form 8938 cross-referencing the 5471, and FBAR for the brokerage account if combined balances exceed $10,000.
• You received $150,000 from your foreign parent and hold a foreign bank account with $75,000: Form 3520 Part IV for the gift, FBAR for the account, and Form 8938 if your total specified foreign assets exceed your threshold.
• You're a 25% partner in a French SARL that elected partnership treatment: Form 8865 for the SARL, Form 8938 cross-referencing the 8865.

Where FBAR fits into the decision tree

FBAR is not an IRS form. It is FinCEN Form 114, filed separately with the Financial Crimes Enforcement Network at the Treasury, once your combined foreign financial accounts exceed $10,000 at any point during the year.

Every US person with foreign accounts above that threshold is required to file it, regardless of whether Forms 8938, 3520, 5471, or 8865 also apply.

The $10,000 threshold is calculated on an aggregate basis. If you hold $4,000 in one account and $7,000 in another, the combined balance crosses the threshold, and FBAR reporting is required for both accounts.

How FBAR differs from the IRS forms

FBAR covers only foreign financial accounts, including bank accounts, brokerage accounts, and similar financial institution accounts in which you hold signature authority or a financial interest. It does not apply to entity interests, directly held securities, trust distributions, or foreign gifts.

Those broader categories fall under the IRS information returns. The Form 8938 vs FBAR overlap is the one most expats encounter, since the same bank account typically lands on both.

When FBAR and Form 8938 overlap

An account that crosses the $10,000 FBAR threshold may also count toward the Form 8938 threshold of $50,000 to $600,000. Both filings list the account separately within their respective systems, with no cross-reference or "reported elsewhere" exception available.

The deadlines also differ. FBAR is due April 15 with an automatic extension to October 15, while Form 8938 follows the Form 1040 deadline, including any extension granted.

What FBAR does not replace

FBAR does not satisfy any IRS information return requirement. A US person who owns a foreign corporation holding a foreign bank account must file Form 5471 for the corporation, FBAR for the account where signature authority applies, and Form 8938 if total specified foreign financial assets exceed the applicable threshold.

The same account is reported in three separate systems, each governed by its own rules and penalty structure.

Missed FBAR filings? See the penalty structure and fix it before the IRS notices

 

Learn more

Penalties for non-disclosure of foreign assets and information returns

The penalty for non-disclosure of foreign assets varies significantly by form: FBAR reaches $16,536 per non-willful violation, Form 8938 starts at $10,000, Form 3520 can reach 35% of the reportable amount, and Forms 5471 and 8865 each carry $10,000 per form per year. Missed international forms can also keep the statute of limitations open on your entire tax return.

Form 8938 penalties

Failure to file Form 8938 triggers an initial $10,000 penalty under IRC § 6038D(d). Continuation penalties of $10,000 per 30 days apply after IRS notice, capped at $50,000.

An accuracy-related penalty of 40% can also apply to any underpayment of tax attributable to undisclosed foreign financial assets.

Form 3520 penalties

Parts I and III of Form 3520, covering foreign trust transfers and distributions, carry a penalty equal to the greater of $10,000 or 35% of the reportable amount under IRC § 6677. Part II penalties for US owners of foreign trusts are the greater of $10,000 or 5% of the gross value of the portion of the trust's assets treated as owned by the US person at year-end.

Part IV, covering foreign gifts and inheritances, uses a different structure. The penalty accrues at 5% of the unreported gift amount per month, capped at 25%.

The IRS may still assess penalties during initial processing of late-filed Forms 3520 and 3520-A, but taxpayers can seek relief by showing reasonable cause. The underlying penalty amounts remain unchanged.

Form 5471 and Form 8865 penalties

Both forms carry $10,000 per form per year for late or incomplete filing under IRC § 6038(b). Continuation penalties of $10,000 per 30 days apply after IRS notice, capped at $50,000.

Form 8865 Category 3 filers face an additional penalty of 10% of the fair market value of contributed property, up to $100,000. Penalty relief for Forms 5471 and 8865 is available under IRS first-time abatement and reasonable cause procedures.

FBAR penalties

Non-willful FBAR violations carry a penalty of up to $16,536 per form for 2025 assessments, adjusted annually for inflation under 31 U.S.C. § 5321. The penalty is applied per form rather than per account, following the Supreme Court's 2023 ruling in Bittner v. United States.

Willful violations are far more severe. The civil penalty reaches the greater of $165,353 or 50% of the account balance at the time of the violation, with criminal penalties up to $250,000 and imprisonment possible under 31 U.S.C. § 5322.

Statute of limitations impact

Missed international information returns can extend the IRS assessment period beyond the standard three years. Under IRC § 6501(c)(8), the period for affected items does not begin to run until three years after the missing information return is filed.

Missing Form 5471 can keep the assessment period open for affected items. The period generally does not begin to run until the missing information is later furnished, at which point the IRS has three years to assess. This is often the most serious consequence of skipping these forms, because it exposes the entire tax year to prolonged audit risk.

Missed a foreign asset form? Current IRS disclosure and catch-up options

The IRS offers four active compliance paths for taxpayers behind on foreign asset reporting: Streamlined Filing Compliance Procedures, Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures, and the IRS Criminal Investigation Voluntary Disclosure Practice. The old Offshore Voluntary Disclosure Program closed in September 2018 and is no longer available.

Streamlined Filing Compliance Procedures

Streamlined Filing is the main catch-up route for non-willful filers. It requires the last 3 years of delinquent or amended tax returns, 6 years of FBARs, and a certification of non-willful conduct on Form 14653 or Form 14654.

The program eliminates FBAR, Form 8938, Form 3520, Form 5471, and Form 8865 penalties for non-willful expats who qualify under the foreign version. It is the most widely used path for the IRS offshore voluntary disclosure program for undisclosed foreign financial assets today, after OVDP closed.

Delinquent FBAR Submission Procedures

This path applies when the only issue is missed FBARs, all foreign income was properly reported, and no taxes are owed. You file the delinquent FBARs electronically through the BSA E-Filing System with a reasonable cause statement attached.

No penalty applies when the procedure is used correctly. The IRS closes the file as long as it has not already started an examination.

Delinquent International Information Return Submission Procedures (DIIRSP)

Most delinquent international information returns are filed with an amended return; Forms 3520 and 3520-A are filed separately under their own instructions. You can attach a reasonable-cause statement where appropriate, and the IRS may still review penalties during processing.

Voluntary Disclosure Practice

The IRS Criminal Investigation Voluntary Disclosure Practice applies to taxpayers whose non-compliance was willful or who face potential criminal exposure. Under the current VDP, the IRS generally applies one civil fraud or fraudulent-failure-to-file penalty to the year with the highest tax deficiency, plus any willful FBAR penalty under the IRS's FBAR rules.

The IRS continues to use its Criminal Investigation Voluntary Disclosure Practice for willful cases. This program replaced the IRS offshore voluntary disclosure program for undisclosed foreign financial assets in 2018. This is the narrow path for willful cases and is not interchangeable with Streamlined Filing.

Streamlined foreign offshore vs Streamlined domestic offshore

Streamlined Filing has two versions that divide filers by residency: Streamlined Foreign Offshore Procedures (SFOP) for expats, and Streamlined Domestic Offshore Procedures (SDOP) for US residents.

SFOP is designed for expats who have lived outside the US for at least 330 full days in one of the last three years, and carries a 0% penalty on undisclosed foreign assets.

SDOP is designed for US residents and carries a 5% miscellaneous offshore penalty calculated on the highest aggregate balance of undisclosed foreign financial assets during the covered period.

Both versions require the same 3 years of returns and 6 years of FBARs, but the certification forms differ: Form 14653 for SFOP and Form 14654 for SDOP.

Examples: which form applies in real expat scenarios

Foreign asset reporting for most US expats falls into a handful of recognizable patterns: accounts-only filings trigger FBAR and sometimes Form 8938; foreign gifts over $100,000 trigger Form 3520; business ownership abroad triggers Form 5471 or Form 8865; and many expats trigger two or three forms at once.

Scenario 1: foreign bank and brokerage accounts

Based on the TFX client scenario: a US software engineer in Germany held €45,000 across a Deutsche Bank checking account, a German savings account, and a DEGIRO brokerage account during 2025. Combined balances crossed both the FBAR and Form 8938 thresholds at year end, triggering the most common foreign asset report combination expats file.

Filing obligation: FBAR for all three accounts because the combined highest balances exceeded $10,000. Form 8938 would not be required on these facts alone for a single filer living abroad, because $45,000 is well below the general overseas filing threshold of more than $200,000 on the last day of the year or more than $300,000 at any time during the year.

Scenario 2: gift from a foreign parent

Based on the TFX client scenario: a US citizen living in Portugal received a $175,000 cash gift from her father in Brazil in March 2025, used toward a property purchase. No other foreign transactions that year.

Filing obligation: Form 3520, Part IV (gift from nonresident individual over $100,000), filed separately from Form 1040 by the same deadline. No FBAR or Form 8938, because the funds were immediately spent and did not sit in a foreign account.

Scenario 3: beneficiary of a family foreign trust

Based on the TFX client scenario: a US expat in Singapore received a $60,000 distribution in 2025 from a discretionary trust established by her grandfather in the UK, where she is one of six named beneficiaries.

Filing obligation: Form 3520, Part III (foreign trust distribution), plus Form 8938 cross-referencing the 3520 on Part IV if her total specified foreign financial assets exceed the threshold. Throwback tax rules may apply to undistributed trust income from prior years.

Scenario 4: owns a foreign limited company

Based on the TFX client scenario: a US consultant in Dubai owns 100% of a UAE free-zone LLC (treated as a corporation for US tax purposes) that earned $220,000 in 2025 and held $40,000 in a corporate bank account.

Filing obligation: Form 5471 (Category 4 and 5 filer, controlled foreign corporation), plus Form 8938 cross-referencing the 5471, plus FBAR if she has signature authority over the corporate account. GILTI and Subpart F reporting also apply.

Scenario 5: owns part of a foreign partnership

Based on the TFX client scenario: a US architect in France holds a 30% interest in a Paris-based SARL that elected partnership treatment under check-the-box rules. US persons collectively own 60%, making it a controlled foreign partnership.

Filing obligation: Form 8865 (Category 2 filer, 10%+ interest in US-controlled partnership), plus Form 8938 cross-referencing the 8865 if her total specified foreign financial assets exceed the threshold.

Scenario 6: entity ownership plus personal accounts

Based on the TFX client scenario: a US entrepreneur in Portugal owns 100% of a Portuguese Lda (corporation), holds two personal bank accounts in Portugal with combined balances of $85,000, and received a $130,000 gift from her mother in Spain during 2025.

Filing obligation: Form 5471 for the Lda, FBAR for both personal accounts, Form 3520 Part IV for the gift, and Form 8938 if her total specified foreign financial assets exceed the filing threshold.

This is the most common combined filing scenario for small-business expat owners and typically requires coordinated preparation across all four forms.

FREE

Not sure which foreign asset form applies? 

We review your accounts, entities, and prior filings, then map the right reporting path.

Schedule my free call