Can overseas savings bank account interest, fixed deposit interest be reported on 8a of 1040 tax form after converting them to US dollar as per the treasury department rates as of Dec 31 of the year?
FBAR(http://www.irs.gov/businesses/small/article/0,,id=148849,00.html) and 6083D don't apply since total overseas assets are less than 3000$
I am in 25% tax bracket since my total US + overseas savings bank account interest, fixed deposit interest income is 44K
Yes. As a U.S. citizen you report your income from all sources. As you point out, interest income gets reported on line 8a (and detailed on Schedule B if it exceeds the threshhold). I usually convert at the exchange rates at the time of receipt. When I liquidate the account and convert the foreign currency to dollars, there is usually a foreign currency gain or loss.
Keep in mind that many foreign countries are taxing the interest income. Such tax can be claimed as a credit or deduction (usually a credit is most beneficial) in computing your U.S. income taxes.
Marty Davidoff, [email protected], 732-274-1600. This answer is provided for general information only. You should seek advice from an attorney or tax professional.
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