8938: Can I exclude my Shares held in Demat Form

pramomod
pramomod Member Posts: 2 Newcomer
edited February 24 in Credits/Deductions

IRS:

Assets Not Required To Be Reported

  1. …….

2. A financial account that is maintained by a dealer or trader in securities or commodities if all of the holdings in the account are subject to the mark-to-market accounting rules for dealers in securities or an election under section 475(e) or (f) is made for all of the holdings in the account

The amount invested was just fifth of the Market Value, that is now attracting FATCA

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Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 250

    Hi parmomod,

    Demat simply refers to an electronic entry of your purchase of an investment, vs. the older format of being issued a physical piece of paper for the shares of XYZ stock or bond you purchased for instance.

    Form 8938, Statement of Specified Foreign Financial Assets, however has to do with foreign financial assets of $100,000 or greater owned by December 31st of a given year, or more than $150,000 at any point in the year.

    Most people who own foreign financial assets don't have enough foreign assets to need to report them to the IRS, or their foreign financial assets are managed by a U.S. payer. If your foreign assets are managed by a U.S. payer such as a U.S. bank, mutual fund or brokerage firm, then those foreign assets don't need to be reported.

    Please review IRS Tax Topic 429 Traders in securities.

    Currently, FreeTaxUSA doesn't support day trader's with a mark to market election.

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