June 17, 2025 • 15 mins
Global Compliance: Tackling Foreign Tax Filings
The hidden complexities of foreign tax compliance often catch even savvy taxpayers by surprise. Tax Supervisor Alex Leslie of MP CPAs draws from a decade of experience to illuminate the maze of international tax reporting requirements that affect Americans with global financial interests.
Most US taxpayers don't realize they're subject to taxation on worldwide income regardless of where it's earned. When foreign accounts or investments enter the picture, multiple disclosure forms become mandatory - not optional. The podcast breaks down critical filing requirements including the Foreign Bank Account Report (FBAR) for accounts exceeding $10,000, Form 8938 for specified foreign financial assets, Form 8865 for foreign partnership interests, and Form 8621 for investments in Passive Foreign Investment Companies (PFICs).
What makes these requirements particularly challenging is their low thresholds and the severe penalties for non-compliance - potentially tens of thousands of dollars per violation. Even more concerning, many taxpayers unknowingly hold reportable foreign investments through domestic partnerships or investment funds without realizing the disclosure obligations that flow through to them personally. The discussion provides clear guidance on identifying these hidden requirements by carefully reviewing investment documents and working proactively with knowledgeable tax professionals.
Whether you're maintaining accounts abroad, investing internationally, or simply concerned about potential foreign reporting obligations, this episode delivers essential insights for protecting your financial future. Don't wait for the IRS to discover overseas assets - take control of your global tax compliance today by understanding these critical reporting requirements.
To learn more about MP CPAs visit:
https://thempgroupcpa.com/
MP CPAs
413-739-1800
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Knowing what Counts podcast, the
place where expert guidancemeets smart financial decisions.
Whether you're a high net worthindividual or a thriving
business, the experts at MPCPAsare here to help you protect and
optimize your wealth.
Let's get started, becausesuccess begins with Knowing what
(00:22):
Counts.
Because success begins withknowing what counts.
Speaker 2 (00:26):
Are you confident you're meeting all your global
tax obligations?
In this episode of Knowing whatCounts, the experienced
professionals at MPCPAs unpackthe complexities of foreign tax
filings.
Welcome back everyone.
I'm Sofia Yvette, co-host slashproducer, back in the studio
with Alex Leslie, tax supervisorat MPCPAs.
(00:49):
Alex, how's it going today?
Speaker 3 (00:51):
It's going pretty good.
How are you today, Sofia?
Speaker 2 (00:54):
I'm also doing good, and that's great to hear.
Alex, let's go ahead and getstarted here.
Can you tell our listeners abit about yourself?
Speaker 3 (01:05):
you tell our listeners a bit about yourself.
Yes, as you mentioned, my nameis Alex Leslie.
I am a CPA.
I am a tax supervisor here atMPCPAs and I've been with the
firm for almost 10 years now.
Speaker 2 (01:14):
Wow.
Well, that's great to hear.
Let's go ahead and get into ita bit more.
So, Alex, let's go intodiscussing how to prepare for
global compliance and how to goabout tackling foreign tax
filings the right way.
So how do you ensure compliancewith both US and foreign tax
(01:38):
laws when preparing tax returnsfor multinational clients?
Returns for multinationalclients.
Speaker 3 (01:44):
Well, the first thing to note is that, for all US
citizens, the United Statestakes what they describe as a
global income approach, and sowhat that means is they tax you
on all of your income,regardless of what country it
comes from, and then typically,if a foreign jurisdiction also
taxes that income, you will beentitled to a credit to offset
(02:07):
some of the US tax on thatforeign sourced income.
Now, the key thing to note isthat the United States has many
tax treaties with all thedifferent countries around the
world, and so how the twocountries, the US andS and the
foreign counterpart, interactwith each other depends on that
specific treaty, and there'skind of no real
(02:28):
one-size-fits-all relationshipwith all the countries out there
, and so the rules can varydepending on which country
you're dealing with, and we dohave resources that we can
connect clients with anaccountant in those foreign
countries to handle thecompliance in that country, and
we mostly focus on the USaspects of filing and the
(02:50):
compliance with the UnitedStates.
And then, in relation to that,there are various different
disclosure forms that you'llneed to file if you have money
in foreign bank accounts orinvest or own foreign entities,
and that's going to be a lot ofwhat we focus on here in this
episode.
Speaker 2 (03:09):
So, alex, what filing requirements am I subject to if
I own a bank account in aforeign country, and what
information am I required todisclose to the government?
Speaker 3 (03:20):
Okay, so for foreign bank accounts, there's two main
forms you're going to want tolook out for.
The first form is called Form114, or the Report of Foreign
Bank and Financial Accounts,often abbreviated as FBAR, and
so the FBAR is required if youhave signature authority over an
account that is located in aforeign country.
(03:42):
An account that is located in aforeign country, and so this
requirement will kind of kick inif the aggregate value of all
of your foreign bank accountsexceeds $10,000 at any point
during the year, and it may bean account that you own, or it
could also be an account that isowned by a business that you
own, where you are the personwho has signature authority over
(04:04):
that account.
So it could be the case whereboth the business and yourself
will need to disclose and fileon separate FBARs, and then so
the FBAR report will get filedwith the Financial Crimes
Enforcement Network, or FinCEN,and the different type of
information that you'll berequired to file on this form is
(04:26):
the type of account that you'reholding, the name of the
financial institution thatoversees the account, the
institution's mailing address,the account number and then the
maximum value of that accountduring the year.
And then so, for the Form 8938,which is the other form that you
may have to file to discloseforeign banking information.
(04:48):
It kind of has a lot of thesame information as the FBAR,
including the name of thefinancial institution, mailing
address, account number andmaximum value, but the filing
thresholds are slightlydifferent.
And so single taxpayers, otherunmarried individuals the
thresholds is if the aggregatevalue of all the accounts is
(05:10):
$50,000 or more at the end ofthe year or if at any time
during the year it's $75,000.
And then if you're married, youwould have to report on the
8938.
That's different than the FBARis.
You would have to disclose ifthe account is maintained in a
foreign currency and whichcurrency that is, and then you
(05:34):
would also need to require ordisclose if it is a deposit
account or a custodial account,and then so this report actually
gets filed with the IRS as partof your tax return.
So it's going to go to adifferent place than the FBAR
will.
Speaker 2 (05:52):
Understood and what other types of accounts would I
be required to disclose on thesetwo forms?
Speaker 3 (05:58):
So the most common that we've already discussed is
your bank accounts, but theywould also require to disclose
any type of financial accountsheld in a foreign country, and
so some of these examples mightbe a foreign brokerage account
or a foreign retirement accountyou would also need to disclose,
and that would need to bedisclosed on both the FBAR and
(06:19):
the 8938.
And then the 8938 even goes astep further.
So if you own stock in aforeign corporation that is held
outside of a financial account,so you just own it directly
yourself, you don't own itthrough a brokerage account or
anything like that you wouldstill need to disclose that on
the 8938.
(06:40):
And it's the same thing if youown an interest in a foreign
partnership or an interest in aforeign hedge fund or a private
equity fund.
So there's a bit more types ofassets you would need to
disclose on the 8938.
Speaker 2 (06:56):
In addition to the FBAR, are there other forms I
may need to file to report theseaccounts?
Speaker 3 (07:04):
Yes, so if you invest in different entities, either
directly or indirectly, you mayneed to file different forms
depending on what type of entityyou're invested in, if you hold
an asset or if you purchase anew asset or things like that.
And so those different entitiesthat you may own that would
(07:24):
subject you to these additionalfiling requirements are going to
be your foreign partnerships,your foreign corporations.
And then there's a special typeof foreign corporation, which
we'll get into a little later,called the passive foreign
investment corporation whenwould I need to be concerned
about investing in a foreignpartnership?
okay, so investing in a foreignpartnership might subject you to
(07:50):
a filing requirement for form8865 and so on the 8865.
There are four differentcategories of filers, and so if
you file under one or more ofthese types of categories, you
would be subject to thisreporting requirement.
And so the first categoryCategory 1, is if you own a
(08:12):
controlling interest in thatpartnership, and that typically
means you own more than 50%interest of that partnership.
And that typically means youown more than 50% interest of
that partnership.
The second category, categorytwo would be if you own at least
a 10% interest in thatpartnership and, combined with
other US partners that also ownat least 10%, you control the
(08:33):
company.
Nobody owns greater than 50% bythemselves.
And then the third categorywould be if you contribute
property to the partnershipduring the year and either you
own at least a 10% interestafter you make the contribution
or the value of the property youcontributed exceeds $100,000,
(08:56):
you would also need to file thisform as a Category 3 filer.
And then the last categoryCategory 4, is if you have what
they call a reportable eventunder Code Section 6046A during
the year, and the most commonexamples of these reportable
events are if you own less than10% and then acquire enough
(09:18):
interest in that partnership toput you over the 10% threshold
during that year, it would beconsidered a Category 4 filer
that year.
Or if you own more than 10% andyou dispose of an interest in
that partnership to bring youbelow 10%, that would also
trigger a Category 4 filingrequirement.
And each one of thesecategories has different
(09:38):
reporting requirements.
So I guess my key piece ofadvice here is if you believe
you fall under any one of thesefour categories, I would
recommend reaching out to yourtax advisor so you can discuss
the implications of what you mayneed to file and to disclose.
Speaker 2 (09:55):
So, alex, you mentioned a passive foreign
investment company.
What is that and what filingrequirements should I be
concerned about?
Speaker 3 (10:04):
Yes, so a passive foreign investment company is a
special type of foreigncorporation, and so there's two
different tests that the passiveforeign investment company
needs to clear, and if any ofone of these tests are met, then
it's considered a passiveforeign investment company is to
clear, and if any of one ofthese tests are met, then it's
considered a passive foreigninvestment company, often
abbreviated as a PFIC.
And so the first test is goingto be your income test, and so
(10:27):
that means that the foreigncorporation at least 75% or more
of the corporation's grossincome for the year, is
considered passive type income,and so different types of
passive income would be thingslike interest income, dividends
income, capital gains income, sothose types of things.
And then the second test isgoing to be your asset test.
(10:49):
So if, during the year, onaverage, at least 50% of the
corporation's assets are assetsthat are used to produce those
types of passive income or areheld for the purpose of
producing that passive income,then they're going to be
considered a PFIC under theasset test.
And then so if you do own aPFIC, you're required to file it
(11:13):
if you are either a directowner or an indirect owner of
the PFIC, and so you would beconsidered an indirect owner if
one of the next couple thingswould apply.
So different types of indirectowners are if you're a 50% or
more shareholder in a foreigncorporation that is not a PFIC
(11:33):
but that PFIC owns stock, orthat foreign corporation excuse
me owns stock in a corporationthat is a PFIC, either directly
or indirectly, then you would beconsidered an indirect owner.
A shareholder in a PFIC wherethat PFIC itself owns another
PFIC, you would be considered anindirect owner of the second
(11:54):
PFIC.
And then 50% or moreshareholder of a domestic
corporation where the domesticcorporation owns a special type
of PFIC known as a Section 1291fund would be considered an
indirect owner.
And lastly, the one that I seethe most often with my clients
is either you're a direct owneror an indirect owner of a
(12:17):
pass-through entity, and thatpass-through entity is either a
direct or indirect shareholderof a PFIC.
And so the important thingabout Form 8621 is that there
are many different filingrequirements depending on what
types of PFIC you're either adirect or indirect shareholder
in.
But the important thing that is, in addition to being required
(12:39):
to file form 8621 to reportthese investments, you may even
be required to report additionaltaxable income as a result of
these investments.
So it is very important toconsult with your tax advisor if
you think you might be ashareholder in one of these
companies.
Speaker 2 (12:57):
So, alex, what happens if I fail to file any of
these forms?
All right, so if you fail tofile any of these forms, Alright
.
Speaker 3 (13:02):
so if you fail to file any of the required forms,
you're going to be subject tosignificant penalties.
These penalties might be ashigh as tens of thousands of
dollars per violation.
It can really stack up if youfail to disclose multiple of
these different types ofaccounts or investments.
So if you have a bunch offoreign bank accounts, foreign
(13:24):
partnerships and foreigncorporations you don't disclose
all of those things, it's veryeasy for your fines to trickle
up to as high as in the sixfigures.
It's very important to get outahead of it and to be proactive
and to kind of disclose allthese things to the government
to make sure that they don'tfind these things and assess you
(13:44):
with all these penalties.
Speaker 2 (13:48):
Now, what final advice would you give to someone
who thinks that they haveactivity in a foreign country?
Speaker 3 (13:53):
I would say definitely speak to a tax
advisor, and then, when you do,it's always important to make
sure that you over-disclosethings to your accountant so
that they can determine whattypes of implications there may
be in relation to these things.
Another advice I would say is alot of times you may not own an
interest in these partnershipsor corporations directly, but
(14:15):
you might own a domesticpartnership that has an interest
in these types of entities, andbecause you own a flow-through
partnership, all thatinformation and all those filing
obligations will flow down toyou.
So you will be required to filethose forms, even if you don't
own them directly, if you ownthem through a lot of these
(14:36):
investment partnerships, and soyou would know if one of your
partnerships is invested in this, because typically that
information would be included inyour Schedule K-1 footnotes,
and so that's why it's importantto kind of get ahead of this,
bring it up to your tax advisorso that they can look out and
make sure we have all theinformation that we need to file
these things.
And then, lastly, we give out atax organizer to all of our
(14:59):
clients every year and then sothis organizer has questions
that will kind of lead ourclients to help them identify
these things at the forefront,so that we can really make sure
we're addressing all theseforeign issues.
Speaker 2 (15:12):
Well, thank you so much for these helpful insights
today.
Alex, have a fantastic rest ofyour day.
Speaker 3 (15:18):
All right, thank you you as well, sophia.
Have a fantastic rest of yourday.
All right, thank you you aswell.
Speaker 1 (15:21):
Sophia, thanks for listening to the Knowing what
Counts podcast.
Ready to optimize your wealthand protect your future, visit
thempgroupscpacom or call413-739-1800 to connect with our
team of experts.
Remember, success is aboutknowing what counts.
Welcome to the Knowing what Counts podcast, the
place where expert guidancemeets smart financial decisions.
Whether you're a high net worthindividual or a thriving
business, the experts at MPCPAsare here to help you protect and
optimize your wealth.
Let's get started, becausesuccess begins with Knowing what
(00:22):
Counts.
Because success begins withknowing what counts.
Speaker 2 (00:26):
Are you confident you're meeting all your global
tax obligations?
In this episode of Knowing whatCounts, the experienced
professionals at MPCPAs unpackthe complexities of foreign tax
filings.
Welcome back everyone.
I'm Sofia Yvette, co-host slashproducer, back in the studio
with Alex Leslie, tax supervisorat MPCPAs.
(00:49):
Alex, how's it going today?
Speaker 3 (00:51):
It's going pretty good.
How are you today, Sofia?
Speaker 2 (00:54):
I'm also doing good, and that's great to hear.
Alex, let's go ahead and getstarted here.
Can you tell our listeners abit about yourself?
Speaker 3 (01:05):
you tell our listeners a bit about yourself.
Yes, as you mentioned, my nameis Alex Leslie.
I am a CPA.
I am a tax supervisor here atMPCPAs and I've been with the
firm for almost 10 years now.
Speaker 2 (01:14):
Wow.
Well, that's great to hear.
Let's go ahead and get into ita bit more.
So, Alex, let's go intodiscussing how to prepare for
global compliance and how to goabout tackling foreign tax
filings the right way.
So how do you ensure compliancewith both US and foreign tax
(01:38):
laws when preparing tax returnsfor multinational clients?
Returns for multinationalclients.
Speaker 3 (01:44):
Well, the first thing to note is that, for all US
citizens, the United Statestakes what they describe as a
global income approach, and sowhat that means is they tax you
on all of your income,regardless of what country it
comes from, and then typically,if a foreign jurisdiction also
taxes that income, you will beentitled to a credit to offset
(02:07):
some of the US tax on thatforeign sourced income.
Now, the key thing to note isthat the United States has many
tax treaties with all thedifferent countries around the
world, and so how the twocountries, the US andS and the
foreign counterpart, interactwith each other depends on that
specific treaty, and there'skind of no real
(02:28):
one-size-fits-all relationshipwith all the countries out there
, and so the rules can varydepending on which country
you're dealing with, and we dohave resources that we can
connect clients with anaccountant in those foreign
countries to handle thecompliance in that country, and
we mostly focus on the USaspects of filing and the
(02:50):
compliance with the UnitedStates.
And then, in relation to that,there are various different
disclosure forms that you'llneed to file if you have money
in foreign bank accounts orinvest or own foreign entities,
and that's going to be a lot ofwhat we focus on here in this
episode.
Speaker 2 (03:09):
So, alex, what filing requirements am I subject to if
I own a bank account in aforeign country, and what
information am I required todisclose to the government?
Speaker 3 (03:20):
Okay, so for foreign bank accounts, there's two main
forms you're going to want tolook out for.
The first form is called Form114, or the Report of Foreign
Bank and Financial Accounts,often abbreviated as FBAR, and
so the FBAR is required if youhave signature authority over an
account that is located in aforeign country.
(03:42):
An account that is located in aforeign country, and so this
requirement will kind of kick inif the aggregate value of all
of your foreign bank accountsexceeds $10,000 at any point
during the year, and it may bean account that you own, or it
could also be an account that isowned by a business that you
own, where you are the personwho has signature authority over
(04:04):
that account.
So it could be the case whereboth the business and yourself
will need to disclose and fileon separate FBARs, and then so
the FBAR report will get filedwith the Financial Crimes
Enforcement Network, or FinCEN,and the different type of
information that you'll berequired to file on this form is
(04:26):
the type of account that you'reholding, the name of the
financial institution thatoversees the account, the
institution's mailing address,the account number and then the
maximum value of that accountduring the year.
And then so, for the Form 8938,which is the other form that you
may have to file to discloseforeign banking information.
(04:48):
It kind of has a lot of thesame information as the FBAR,
including the name of thefinancial institution, mailing
address, account number andmaximum value, but the filing
thresholds are slightlydifferent.
And so single taxpayers, otherunmarried individuals the
thresholds is if the aggregatevalue of all the accounts is
(05:10):
$50,000 or more at the end ofthe year or if at any time
during the year it's $75,000.
And then if you're married, youwould have to report on the
8938.
That's different than the FBARis.
You would have to disclose ifthe account is maintained in a
foreign currency and whichcurrency that is, and then you
(05:34):
would also need to require ordisclose if it is a deposit
account or a custodial account,and then so this report actually
gets filed with the IRS as partof your tax return.
So it's going to go to adifferent place than the FBAR
will.
Speaker 2 (05:52):
Understood and what other types of accounts would I
be required to disclose on thesetwo forms?
Speaker 3 (05:58):
So the most common that we've already discussed is
your bank accounts, but theywould also require to disclose
any type of financial accountsheld in a foreign country, and
so some of these examples mightbe a foreign brokerage account
or a foreign retirement accountyou would also need to disclose,
and that would need to bedisclosed on both the FBAR and
(06:19):
the 8938.
And then the 8938 even goes astep further.
So if you own stock in aforeign corporation that is held
outside of a financial account,so you just own it directly
yourself, you don't own itthrough a brokerage account or
anything like that you wouldstill need to disclose that on
the 8938.
(06:40):
And it's the same thing if youown an interest in a foreign
partnership or an interest in aforeign hedge fund or a private
equity fund.
So there's a bit more types ofassets you would need to
disclose on the 8938.
Speaker 2 (06:56):
In addition to the FBAR, are there other forms I
may need to file to report theseaccounts?
Speaker 3 (07:04):
Yes, so if you invest in different entities, either
directly or indirectly, you mayneed to file different forms
depending on what type of entityyou're invested in, if you hold
an asset or if you purchase anew asset or things like that.
And so those different entitiesthat you may own that would
(07:24):
subject you to these additionalfiling requirements are going to
be your foreign partnerships,your foreign corporations.
And then there's a special typeof foreign corporation, which
we'll get into a little later,called the passive foreign
investment corporation whenwould I need to be concerned
about investing in a foreignpartnership?
okay, so investing in a foreignpartnership might subject you to
(07:50):
a filing requirement for form8865 and so on the 8865.
There are four differentcategories of filers, and so if
you file under one or more ofthese types of categories, you
would be subject to thisreporting requirement.
And so the first categoryCategory 1, is if you own a
(08:12):
controlling interest in thatpartnership, and that typically
means you own more than 50%interest of that partnership.
And that typically means youown more than 50% interest of
that partnership.
The second category, categorytwo would be if you own at least
a 10% interest in thatpartnership and, combined with
other US partners that also ownat least 10%, you control the
(08:33):
company.
Nobody owns greater than 50% bythemselves.
And then the third categorywould be if you contribute
property to the partnershipduring the year and either you
own at least a 10% interestafter you make the contribution
or the value of the property youcontributed exceeds $100,000,
(08:56):
you would also need to file thisform as a Category 3 filer.
And then the last categoryCategory 4, is if you have what
they call a reportable eventunder Code Section 6046A during
the year, and the most commonexamples of these reportable
events are if you own less than10% and then acquire enough
(09:18):
interest in that partnership toput you over the 10% threshold
during that year, it would beconsidered a Category 4 filer
that year.
Or if you own more than 10% andyou dispose of an interest in
that partnership to bring youbelow 10%, that would also
trigger a Category 4 filingrequirement.
And each one of thesecategories has different
(09:38):
reporting requirements.
So I guess my key piece ofadvice here is if you believe
you fall under any one of thesefour categories, I would
recommend reaching out to yourtax advisor so you can discuss
the implications of what you mayneed to file and to disclose.
Speaker 2 (09:55):
So, alex, you mentioned a passive foreign
investment company.
What is that and what filingrequirements should I be
concerned about?
Speaker 3 (10:04):
Yes, so a passive foreign investment company is a
special type of foreigncorporation, and so there's two
different tests that the passiveforeign investment company
needs to clear, and if any ofone of these tests are met, then
it's considered a passiveforeign investment company is to
clear, and if any of one ofthese tests are met, then it's
considered a passive foreigninvestment company, often
abbreviated as a PFIC.
And so the first test is goingto be your income test, and so
(10:27):
that means that the foreigncorporation at least 75% or more
of the corporation's grossincome for the year, is
considered passive type income,and so different types of
passive income would be thingslike interest income, dividends
income, capital gains income, sothose types of things.
And then the second test isgoing to be your asset test.
(10:49):
So if, during the year, onaverage, at least 50% of the
corporation's assets are assetsthat are used to produce those
types of passive income or areheld for the purpose of
producing that passive income,then they're going to be
considered a PFIC under theasset test.
And then so if you do own aPFIC, you're required to file it
(11:13):
if you are either a directowner or an indirect owner of
the PFIC, and so you would beconsidered an indirect owner if
one of the next couple thingswould apply.
So different types of indirectowners are if you're a 50% or
more shareholder in a foreigncorporation that is not a PFIC
(11:33):
but that PFIC owns stock, orthat foreign corporation excuse
me owns stock in a corporationthat is a PFIC, either directly
or indirectly, then you would beconsidered an indirect owner.
A shareholder in a PFIC wherethat PFIC itself owns another
PFIC, you would be considered anindirect owner of the second
(11:54):
PFIC.
And then 50% or moreshareholder of a domestic
corporation where the domesticcorporation owns a special type
of PFIC known as a Section 1291fund would be considered an
indirect owner.
And lastly, the one that I seethe most often with my clients
is either you're a direct owneror an indirect owner of a
(12:17):
pass-through entity, and thatpass-through entity is either a
direct or indirect shareholderof a PFIC.
And so the important thingabout Form 8621 is that there
are many different filingrequirements depending on what
types of PFIC you're either adirect or indirect shareholder
in.
But the important thing that is, in addition to being required
(12:39):
to file form 8621 to reportthese investments, you may even
be required to report additionaltaxable income as a result of
these investments.
So it is very important toconsult with your tax advisor if
you think you might be ashareholder in one of these
companies.
Speaker 2 (12:57):
So, alex, what happens if I fail to file any of
these forms?
All right, so if you fail tofile any of these forms, Alright
.
Speaker 3 (13:02):
so if you fail to file any of the required forms,
you're going to be subject tosignificant penalties.
These penalties might be ashigh as tens of thousands of
dollars per violation.
It can really stack up if youfail to disclose multiple of
these different types ofaccounts or investments.
So if you have a bunch offoreign bank accounts, foreign
(13:24):
partnerships and foreigncorporations you don't disclose
all of those things, it's veryeasy for your fines to trickle
up to as high as in the sixfigures.
It's very important to get outahead of it and to be proactive
and to kind of disclose allthese things to the government
to make sure that they don'tfind these things and assess you
(13:44):
with all these penalties.
Speaker 2 (13:48):
Now, what final advice would you give to someone
who thinks that they haveactivity in a foreign country?
Speaker 3 (13:53):
I would say definitely speak to a tax
advisor, and then, when you do,it's always important to make
sure that you over-disclosethings to your accountant so
that they can determine whattypes of implications there may
be in relation to these things.
Another advice I would say is alot of times you may not own an
interest in these partnershipsor corporations directly, but
(14:15):
you might own a domesticpartnership that has an interest
in these types of entities, andbecause you own a flow-through
partnership, all thatinformation and all those filing
obligations will flow down toyou.
So you will be required to filethose forms, even if you don't
own them directly, if you ownthem through a lot of these
(14:36):
investment partnerships, and soyou would know if one of your
partnerships is invested in this, because typically that
information would be included inyour Schedule K-1 footnotes,
and so that's why it's importantto kind of get ahead of this,
bring it up to your tax advisorso that they can look out and
make sure we have all theinformation that we need to file
these things.
And then, lastly, we give out atax organizer to all of our
(14:59):
clients every year and then sothis organizer has questions
that will kind of lead ourclients to help them identify
these things at the forefront,so that we can really make sure
we're addressing all theseforeign issues.
Speaker 2 (15:12):
Well, thank you so much for these helpful insights
today.
Alex, have a fantastic rest ofyour day.
Speaker 3 (15:18):
All right, thank you you as well, sophia.
Have a fantastic rest of yourday.
All right, thank you you aswell.
Speaker 1 (15:21):
Sophia, thanks for listening to the Knowing what
Counts podcast.
Ready to optimize your wealthand protect your future, visit
thempgroupscpacom or call413-739-1800 to connect with our
team of experts.
Remember, success is aboutknowing what counts.
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