Trust accounts: FBAR and Form 8938 overlap
IRS and FinCEN materials describe trust-related FBAR and Form 8938 reporting. The materials cover ownership, authority, overlap and exceptions for U.S. citizens.
How the two reporting systems differ
FBAR reporting concerns foreign financial accounts. A U.S. person, including a citizen or trust, reports a financial interest in or signature or other authority over an account outside the United States when the aggregate value of foreign accounts exceeds $10,000 at any time during the calendar year. Whether the account generated taxable income does not change its foreign-account status for FBAR purposes.[10]
Form 8938 concerns specified foreign financial assets and is attached to the annual income tax return. The general threshold is more than $50,000, with higher thresholds for some taxpayers. A taxpayer who does not have to file an income tax return does not file Form 8938 for that tax year, regardless of asset value.[2]
The forms have separate requirements and may cover different assets. Some foreign accounts appear on both, while specified foreign assets outside a financial institution account can be reportable on Form 8938 without being FBAR accounts. Filing one form does not by itself satisfy the other regime.[3]
Trust ownership and Form 8938
For Form 8938, a person treated as owner of part of a trust under grantor trust rules has an interest in specified foreign financial assets held by that owned portion. A beneficiary may also have an interest in the foreign trust itself. That interest is a specified foreign financial asset, but it is reportable only if the beneficiary knows or has reason to know of it based on readily accessible information. A distribution is treated as knowledge of the interest.[1]
A conditional exception applies to an owner of part of a foreign trust. The owner need not report assets held by that portion if the owner timely reports the trust on Form 3520, ensures timely filing of Form 3520-A or a substitute, and identifies those filings on Form 8938. The reported assets still count toward the applicable reporting threshold.[1]
Specified foreign financial assets reported on certain other forms, including Forms 3520 and 3520-A, need not have their asset details repeated on Form 8938. Form 8938 identifies which forms were filed, and asset values reported on those forms remain relevant to the threshold calculation.[3]
Trust accounts and FBAR responsibility
FBAR rules focus on account financial interest or signature authority. A beneficiary with a financial interest in a trust's foreign accounts, based on a present beneficial interest in more than 50 percent of the trust assets or current income, is not required to report those accounts if the trust, trustee or agent is a U.S. person and files an FBAR disclosing them.[4]
That beneficiary rule has conditions. The FBAR must be filed by the trust, its trustee or its agent, and that filer must be a U.S. person and must disclose the trust accounts. It is a rule about FBAR reporting, not a general exception from Form 8938.[10]
The IRS cautions that exceptions connected with foreign trust reporting do not remove possible Form 8938 or FinCEN Form 114 obligations. Accordingly, an exception under one regime does not automatically resolve whether the other applies; the account, person and form-specific conditions remain distinct.[7]
Practical boundaries in the published rules
The IRS instructions say that, in most cases, a person does not own an interest in each specified foreign financial asset held by a trust solely because the person is a beneficiary. Grantor trust ownership is separately addressed, as is a beneficiary's possible interest in the foreign trust itself.[1]
These rules distinguish the trust's account from a person's interest in the trust and from authority to act over an account. Form 8938 and FBAR therefore cannot be treated as interchangeable reports; each set of instructions determines whether a particular connection triggers reporting.[3]
Data table for this infographic
| Topic | FBAR | Form 8938 |
|---|---|---|
| Summary | The two filings overlap in subject matter but have separate tests, separate recipients and separate trust rules. | |
| Form and recipient | FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), filed with FinCEN | Form 8938, Statement of Specified Foreign Financial Assets, attached to the annual return and filed with the IRS |
| Who files | A United States person with a financial interest in or signature authority over foreign financial accounts | Certain U.S. taxpayers holding financial assets outside the United States |
| What is counted | Foreign financial accounts | Specified foreign financial assets: accounts at foreign financial institutions, plus listed assets held for investment, such as stock or securities issued by a non-U.S. person and any interest in a foreign entity |
| Value test | Aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year | Generally an aggregate value above $50,000, with higher thresholds in some cases. Form 8938 is not needed when no income tax return is required |
| Foreign trust rule | Exception for a beneficiary whose financial interest in a trust account rests on a present beneficial interest in more than 50 percent of the trust assets or current income: no filing is needed when the trust, trustee or agent is a U.S. person and files an FBAR disclosing the trust's foreign accounts | Specified foreign financial assets held by the owned portion of a foreign trust (sections 671 through 679) are excluded when the owner timely files Form 3520 for the same tax year, ensures the trust timely files Form 3520-A or a substitute, and reports both filings on Form 8938 |
| Other reporting | Specified foreign financial assets already reported on Form 3520 or 3520-A (filed by the trust), 5471, 8621 or 8865 need not be reported a second time on Form 8938. Form 8938 still lists which of those forms were filed, and the asset's value counts toward the threshold. | |
| Where the two meet | Filing Form 8938 does not relieve a person of the FBAR requirement if the person is otherwise required to file the FBAR. The IRS publishes a comparison chart of the two sets of filing requirements. | |
| Notes | Form 8938 thresholds may be higher in some cases. The instructions for the tax year concerned govern. | |
| Sources | FinCEN FBAR line item filing instructions (financial interest, signature authority, accounts, trust beneficiaries) · IRS Instructions for Form 8938 (specified foreign financial assets; foreign trust owners; relationship to the FBAR) · IRS FATCA information for individuals · IRS summary of FATCA reporting for U.S. taxpayers | |
Questions and answers
Does filing Form 8938 replace an FBAR?
No. The IRS says Form 8938 does not relieve a filer of FBAR requirements. Some accounts may be reported on both forms, while their rules and required information differ.[3]
When can a trust beneficiary omit trust accounts from an FBAR?
An exception applies when the trust, trustee or agent is a U.S. person and files an FBAR disclosing the trust's foreign accounts. The exception covers a beneficiary whose financial interest rests on a present beneficial interest in more than 50 percent of the trust assets or current income.[4]
Does being a trust beneficiary automatically mean reporting each trust asset on Form 8938?
No. The Form 8938 instructions state that, in most cases, beneficiary status alone does not create an interest in each asset held by a trust. The instructions separately address grantor trust owners and a known interest in a foreign trust.[1]
What conditions apply to the foreign grantor trust exception on Form 8938?
The owner reports the trust on a timely Form 3520, ensures timely filing of Form 3520-A or a substitute, and reports the filings on Form 8938. The exception concerns assets held by the portion treated as owned.[1]
Can an exception for trust reporting remove both forms?
No. There is no automatic cross-form exception. The IRS says foreign trust exceptions do not affect possible Form 8938 obligations or other requirements, including FinCEN Form 114.[7]
Related resources
Related glossary terms
- FBAR: The FBAR is the FinCEN report U.S. persons file when the aggregate value of their foreign financial accounts exceeds $10,000 at any time during the calendar year, with rules on account interests and exceptions.
- Foreign financial account: Form 8938 treats a financial account maintained by a foreign financial institution as a specified foreign financial asset. FBAR rules identify reportable accounts by type and location.
- Financial interest in an account: FBAR rules define financial interest through account ownership or relationships to the legal title holder. A U.S. person who is the owner of record or holder of legal title has a financial interest.
Related articles and guides
- Due diligence and controlling persons of a trust: The CRS describes due diligence as account review by institutions to identify reportable accounts and information, including tests for entity accounts.
- FBAR and Form 8938 for accounts linked to trusts: FBAR and Form 8938 are separate reports with different filing tests for a U.S. citizen, covering both foreign accounts and trust interests.
- PFIC holdings and trust reporting: PFIC classification tests and related reporting apply to U.S. citizens with direct or indirect interests, including interests held through foreign trusts.
Tools and official documents
- FinCEN Report 114 (FBAR): foreign account reporting: FinCEN Report 114 (FBAR) for U.S. citizens: account definitions, financial interests, signature authority, trust provisions and the filing requirements it sets.
Related pages
Sources and data notes
- irs.gov, Instructions for Form 8938 (11/2021) | Internal Revenue Service. https://www.irs.gov/instructions/i8938. Retrieved .
- irs.gov, FATCA information for individuals | Internal Revenue Service. https://www.irs.gov/businesses/corporations/fatca-information-for-individuals. Retrieved .
- irs.gov, Summary of FATCA reporting for U.S taxpayers | Internal Revenue Service. https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers. Retrieved .
- fincen.gov, BSA Electronic Filing Requirements for Report of Foreign Bank and Financial Accounts (FinCEN Form 114). https://www.fincen.gov/sites/default/files/shared/FBAR%20Line%20Item%20Filing%20Instructions.pdf. Retrieved .
- daypitney.com, Automatic Extension for FBARs. https://www.daypitney.com/insights/publications/2017/04/14-automatic-extension-for-fbars. Retrieved .
- proskauer.com, Extension of FBAR Filing Deadline for Certain Filers, Insights, Proskauer Rose LLP. https://www.proskauer.com/blog/extension-of-fbar-filing-deadline-for-certain-filers-2020. Retrieved .
- irs.gov, Foreign trust reporting requirements and tax consequences | Internal Revenue Service. https://www.irs.gov/businesses/international-businesses/foreign-trust-reporting-requirements-and-tax-consequences. Retrieved .
- irs.gov, Reminder to U.S. owners of a foreign trust | Internal Revenue Service. https://www.irs.gov/individuals/international-taxpayers/reminder-to-us-owners-of-a-foreign-trust. Retrieved .
- irs.gov, Summary of key FATCA provisions | Internal Revenue Service. https://www.irs.gov/businesses/corporations/summary-of-key-fatca-provisions. Retrieved .
- irs.gov, Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service. https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar. Retrieved .
- irs.gov, Instructions for Form 8621 (12/2025) | Internal Revenue Service. https://www.irs.gov/instructions/i8621. Retrieved .
- irs.gov, How to report foreign bank and financial accounts | Internal Revenue Service. https://www.irs.gov/newsroom/how-to-report-foreign-bank-and-financial-accounts. Retrieved .
Dates in this block record when each source was read for this page.