FBAR for joint accounts, spouses and children

The Form 114 instructions define a joint account as a financial account owned jointly by two or more persons.⁠^{[1]Source 1} Under the FBAR regulation, if an account is maintained in the name of more than one person, each U.S. person in whose name the account is maintained has a financial interest in that account.⁠^{[2]Source 2} The account must still be a reportable foreign financial account.

IRS examination guidance says the same thing from the other direction: because the FBAR is a report of foreign financial accounts, the entire value of a jointly owned account is reported on each FBAR, and accounts are not prorated for a person’s percentage of ownership.⁠^{[3]Source 3}

Each person’s filing requirement is still their own. The FBAR regulation places the reporting requirement on each U.S. person with a financial interest in, or signature or other authority over, a foreign financial account.⁠^{[2]Source 2} A joint owner who is not a U.S. person is outside that requirement, and the U.S. owner still reports the full value of the account.⁠^{[2]Source 2}⁠^{[3]Source 3}

IRS examination guidance lists jointly owned accounts among the accounts included when a person determines whether the aggregate value of their foreign accounts exceeded $10,000.⁠^{[3]Source 3} Each account is valued at its own maximum value, so a joint account enters each owner’s aggregate at its full maximum value.⁠^{[1]Source 1}⁠^{[3]Source 3}

Because each owner aggregates their own accounts, two people who share one account can reach different answers: the account counts in full for both, but their other accounts may differ. See how the $10,000 aggregate threshold works for the test itself.

Jointly owned accounts go in Part III of the FBAR. For each one, the filer gives the account and financial-institution information, the number of joint owners and the identifying information of the principal joint owner.⁠^{[1]Source 1}⁠^{[5]Source 5}

• The number of joint owners does not count the filer. If the exact number is not known, the instructions allow an estimate.⁠^{[1]Source 1}⁠^{[5]Source 5}
• If the filer’s spouse has an interest in the jointly owned account, the spouse is the principal joint owner.⁠^{[1]Source 1}⁠^{[5]Source 5}
• Items for which no information is available are left blank, and a joint owner’s taxpayer identification number can be a U.S. or foreign number.⁠^{[1]Source 1}⁠^{[5]Source 5}

Only under the spouse exception in the Form 114 instructions. The spouse of an individual who files an FBAR is not required to file a separate FBAR if all three of these conditions are met:⁠^{[1]Source 1}⁠^{[4]Source 4}

1. 1

   All the financial accounts that the non-filing spouse is required to report are jointly owned with the filing spouse.

2. 2

   The filing spouse reports the jointly owned accounts on a timely filed FBAR, electronically signed.

3. 3

   The filers have completed and signed Form 114a, “Record of Authorization to Electronically File FBARs”, kept with the filers’ records.

Otherwise, both spouses are required to file separate FBARs, and each spouse must report the entire value of the jointly owned accounts.⁠^{[1]Source 1}⁠^{[4]Source 4} For the mechanics of preparing and submitting the report, see how to file an FBAR yourself.

The IRS notes that income-tax filing status, such as married filing jointly or married filing separately, has no effect on whether spouses qualify for this exception.⁠^{[7]Source 7}

FinCEN states that a child is generally responsible for filing their own FBAR. If a child cannot file their own FBAR for any reason, such as age, the child’s parent, guardian or other legally responsible person must file it for the child.⁠^{[8]Source 8}

If the child cannot sign, a parent or guardian electronically signs the child’s FBAR and enters “Parent/Guardian filing for child” as the filer title in Item 45.⁠^{[8]Source 8}

The child’s FBAR is the child’s report: whether one is required depends on the child’s own accounts and the child’s own aggregate value. IRS examination guidance states that the family attribution rules of the Internal Revenue Code do not apply to FBAR reporting.⁠^{[3]Source 3}

If a parent and child are both named on a foreign account, the joint-account rule applies to each of them: each U.S. person in whose name the account is maintained has a financial interest in it.⁠^{[2]Source 2} The exception for one filer covering joint accounts is written for spouses; the instructions do not extend it to other joint owners.⁠^{[1]Source 1}