PBH / colombia (travelguide, pictures) / post

Calling All Experts!

I'm in another fine mess and I have a question about american citizens holding foreign bank accounts.

My lawyer told me that if I have a bank account in Colombia, or any other foreign country for that matter, and the total of these accounts add up to a balance of $10,000 or more, at anytime during a calender year, that I am required to fill out ¨¨Foreign Bank Account Report (Form TD F 90-22.1) ¨¨ each June. This is to be filed with the US Treasury.

He says there can be serious repercussions for not cooperating.

Now there are at the very least 50 threads here at PBH on people opening bank accounts and buying homes. Does anybody know anything about this form?

By gringoloid on Dec 1, 2007, 16:19 in Friendly Talkzone.

Gator says on Dec 1, 2007, 16:34:

You must fill out Treasury Department Form 90-22.1 every year if you own, or have an interest in, any foreign bank accounts. Form 90-22.1 is due June 30th of each year to report foreign bank accounts owned in the previous year. You must report accounts you hold in foreign banks and other financial institutions if your total balance is $10,000 or greater. The real kicker is the reporting kicks in IF AT ANY TIME DURING THE YEAR the acount passed 10.000 USD even if it late drops below that amount.

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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Atrevido says on Dec 1, 2007, 17:39:

What is the rational of US Treasury Department Form 90-22? Is the idea that you will pay taxes to the US on funds held in foreign accounts or what?

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RussianFred says on Dec 1, 2007, 17:49:

Gator is right. As an American citizen you are taxed on your world wide income. Your interest income is taxable. Also they want to track money laundering.

Annual Drug Deaths: Tobacco: 395,000, Alcohol: 125,000, 'Legal' Drugs: 38,000, Illegal Drug Overdoses: 5,200, Marijuana: 0. Considering government subsidies of tobacco, just what is our government protecting us from in the drug war?--Ralph Nader

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la campiña says on Dec 1, 2007, 18:57:

Keep your money out of colombia, continue with your account in the states, if you are serious about purchasing property here I know how and its very easy.

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christobeldawg says on Dec 1, 2007, 19:01:

spill the beans la camp, por favor.

admittedly, arriving can feel great too

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la campiña says on Dec 1, 2007, 20:27:

I have two friends here in ( cali) that have bought properties and at this very moment are renovating, changing, building etc, so I'll speak to them and with there permission I'll come back to you , also I live in a gargantuan house that is owned by an outsider ha, I am the jefe here, but lawyers and paper work is crucial

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christobeldawg says on Dec 1, 2007, 20:31:

gracias. let me know if you get any essential info. If it is not basically simple and straightforward, investing in real estate there in Colombia, or investing in trade or anything else, is not worth the hassle.

admittedly, arriving can feel great too

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la campiña says on Dec 1, 2007, 20:51:

to be honest investing in real estate here in cali is YES YES YES, I can only speak for what i am seeing in my barrio, cali is slowly but surely becoming popular, mail me, you will not be waisting your time.

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miamimike says on Dec 2, 2007, 01:18:

This Law was chaged in 2005; you have Mr Bush and his Republican Congress(esp Mr Grassley-Rep) to thank for this Tax Hike on Ex-Pats! Vote next time with your Pockerbook in Mind! ThoseBlackwater Employees in Iraq cannot be happy! LOL
Summary:
http://www.overseasdigest.com/new-tax-rules-2006.htm

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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scotty says on Dec 2, 2007, 03:25:

have you ever concidered just getting a good lawyer and a good accountant and find out what you need to know?

Get Rhythm, when you got the blues. Johnny Cash

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aztec says on Dec 2, 2007, 04:27:

As Gator states above you must report the account. In addition to the form mentioned I believe you also have to indicate on your Federal Return you have a foreign account.

In response to miamimike, I believe a tax has been in effect long before Bush.

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Lowell says on Dec 2, 2007, 05:43:

There's a huge exemption on taxes for money earned abroad. 75k?.

Alfred E. Newman. "What. Me Worry?"

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Gator says on Dec 2, 2007, 07:49:

Taxes don't enter into the equation-the fact that you have a foreign account that at least once a year exceeded 10.000USD triggers the reporting requirement.

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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miamimike says on Dec 2, 2007, 08:37:

Aztec, Bush here's the exact date Bush(and him alone) signed the increase into Law! --" On May 17, 2006, President Bush signed into law tax legislation with the interesting title of “The Tax Increase Prevention Reconciliation Act of 2005�?. This awkwardly worded law seems to suggest that taxes would not increase, even though it holds out no promise of them being reduced. But Americans living overseas will have a big surprise come tax filing time in 2007. Not only will many expats owe more US tax, but they will find the tax changes apply retroactively to January 2006."

"Wait a minute. What did you just say? You're predicting $4-a-gallon gas? That's interesting. I hadn't heard that." -- Feb. 28, 2008 --George W. Bush, Washington, D.C.

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RussianFred says on Dec 2, 2007, 08:39:

Gator is right again. Even if the account is non-interest bearing you are required to report the information.

http://www.irs.gov/pub/irs-pdf/p4261.pdf

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Waterdawg says on Dec 2, 2007, 09:52:

The not so funny thing is that we are one of the few County's that require any thing like this . There a ton of Country's that don't tax any income outside the country .. You got's to love big brother . They don't care if you leave , but your money is another story ..

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Robert Jorge says on Dec 2, 2007, 11:05:

Yep, since 9/11ish, $10,000 has triggered certain mechanisms when dealing with banks. Anytime I would make a deposit for my store over $10,000, I would have to produce my ID and give 10 seconds worth of information. And this was me as a manager simply depositing the previous day's cash and checks into the corporate account (Aeropostale) at the local bank. I imagine it is the same deal with the foreign bank accounts. Anything over $10,000 triggers a requirement to report it and produce positive ID. I do not think it changes the tax code or anything like that. I could be misinformed, but nothing (tax-wise) should be different when talking about foreign investment, bank accounts, etc. than it has been for quite a while.

--"I believe in making the world safe for our children. But not for our children's children, because I don't think that children should be having sex." - Jack Handy

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goin_south says on Dec 2, 2007, 13:03:

I don't know anything about 'international', but even before 9/11... if you deposited or withdrew $10,000.00 or more, it would trigger 'reporting papers'... I suppose mostly just for IRS purposes. For example, at a casino... if they paid you under 10k, no reporting... but, more than that... then, they have and always had to send in reports. I think.

Ciao! Gustav. Bienvenitos, Ike.

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slguy says on Dec 2, 2007, 14:13:

Maybe I'm talking out of school, but there are many countries around the world who have created banking havens where absent fairly substantive proof of drug dealing/money laundering, the IRS has no access to account information. As long one doesn't repatriate the funds to the US, no reporting happens.

I for one would have ZERO problems with ignoring the offshore reporting requirement, if I was in that situation. ;) Uncle Sam gets plenty of taxes from me on my US income. I'll be damned if he gets his hooks in my offshore income that has nada to do with the US., if I had any. :)

Before you throw me out, make sure I pay my bar tab

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RussianFred says on Dec 2, 2007, 14:24:

Actually the $10,000 magic number start in the early 1980s. I was on a task force with the IRS investigating drug dealers. We decided to summon the car dealerships in NYC. We was looking for cash deposit and payments. We decided the magic number would be 10k .
The project rseulted in over 20 million dollars in unreported income. The project then went national and became law.

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aztec says on Dec 2, 2007, 17:39:

Simply surrender your US citizenship and eventually you will be free of reporting any income to the US for tax purposes.

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gold digger says on Dec 2, 2007, 21:33:

Last I heard, there was a tax exemption of $100,000 on money earned abroad. I personally don't think it's right for a country to get taxes from money earned in another country.
The $10,000 form is to track drug money laundering. It worked so well that there are now no drugs in the USA.

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RussianFred says on Dec 2, 2007, 22:22:

If you surrender / give up your US citizenship you can still be taxed up to 10 years. If the US government proves you did it for tax purposes.

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RussianFred says on Dec 2, 2007, 22:29:

The tax exemption is also b/s for most people. You can not be in the US for more than 30 days in a Calender year to qualify.

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Gator says on Dec 3, 2007, 08:44:

and it must be EARNED income.

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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gold digger says on Dec 3, 2007, 19:29:

which is why there are so many offshore bank accounts.

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tomtom33 says on Dec 4, 2007, 03:23:

Whatever anyone says or does not say, it is always best to have a good accounting firm on retainer. Things can and do change rapidly.

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