declaring foreign assets on Japanese tax return

[captainspoke]

...
... It seems you don't need to specify what stock or currency it is so it looks like: 上場株式　一般用　　[BROKER ADDRESS] [#OF SHARES] [VALUE IN YEN AS OF 12/31]

You only pay tax on any income, not the assets. However, be careful because they will likely use the info next year to see if you made any sales which should accrue capital gains tax.

Perhaps my case is 'simple' since I only have one broker, and everything is either a stock, fund, or MMF (no land, no diamonds, no picassos/chagals, no pixie dust). I itemize each stock, and each individual fund. This past year (year before, too?) there was a split box for each item where value was listed--as both the current value, and cost basis. These differing amounts for each item/fund were totaled separately at the bottom (total for basis, total for current value).

[TokyoWart]

...
... It seems you don't need to specify what stock or currency it is so it looks like: 上場株式　一般用　　[BROKER ADDRESS] [#OF SHARES] [VALUE IN YEN AS OF 12/31]

You only pay tax on any income, not the assets. However, be careful because they will likely use the info next year to see if you made any sales which should accrue capital gains tax.

Perhaps my case is 'simple' since I only have one broker, and everything is either a stock, fund, or MMF (no land, no diamonds, no picassos/chagals, no pixie dust). I itemize each stock, and each individual fund. This past year (year before, too?) there was a split box for each item where value was listed--as both the current value, and cost basis. These differing amounts for each item/fund were totaled separately at the bottom (total for basis, total for current value).

I note both captainspoke and eyeswideshut report listing each foreign stock position on that form or as an attachment. This is not my experience. My forms report totals by brokerage account but not by individual stock positions. I had to go through a detailed audit of my foreign holdings several years and at that time the tax office didn't ask for a breakdown by position (they focused on 1099 forms to verify gains/losses) but they did want to apply their own exchange rate for the year-end reported values (not the exchange rate used by the US Treasury Department which I had used).

[eyeswideshut]

I note both captainspoke and eyeswideshut report listing each foreign stock position on that form or as an attachment. This is not my experience. My forms report totals by brokerage account but not by individual stock positions. I had to go through a detailed audit of my foreign holdings several years and at that time the tax office didn't ask for a breakdown by position (they focused on 1099 forms to verify gains/losses) but they did want to apply their own exchange rate for the year-end reported values (not the exchange rate used by the US Treasury Department which I had used).

Interesting. Do you think you were audited because you were not disclosing the individual assets in the brokerage account? I thought it was strange that I was required to list each stock separately on the attachment but not required to reveal the actual tickers. It makes it somewhat pointless for disclosure purposes. Reporting the total value of a brokerage account would be a lot simpler but I would not want to red flag my filing for an audit - ugh.

there was a split box for each item where value was listed--as both the current value, and cost basis.

I have never seen this before - I have never needed to disclose the cost basis for any of the assets I disclose, only their value on 12/31. I wonder if this is your accountant's practice?

[TokyoWart]

My audit was related to the handling of foreign taxes for senior executives of Japanese firms. Americans in Japan are normally allowed to claim the taxes paid to the US federal government for their employment income in Japan based on time spent in the US on business and get a deduction or pro-rated offset on taxes in Japan. That was performed by my accountant (I actually had a written interpretation from another firm that specialized in Japanese taxes for foreigners that said this treatment was correct) but it turns out if you are a corporate officer with global responsibility at a multinational Japanese firm the deduction is not allowed according to the reading of the Japanese tax authorities because your work is assumed to be global. The point is actually a little unclear since that isn't the immediate reading of the Japan-US tax treaty but after consulting two other (larger and more expensive) tax accounting firms and a law office we accepted the Japanese authorities' interpretation and paid additional taxes. That was a huge project which took most of a year to address (by the accountants) and re-submission of several years' worth of returns. As part of that we recalculated foreign assets using the different exchange rates but there was no meaningful impact on taxes from investments.

[captainspoke]

...

there was a split box for each item where value was listed--as both the current value, and cost basis.

I have never seen this before - I have never needed to disclose the cost basis for any of the assets I disclose, only their value on 12/31. I wonder if this is your accountant's practice?

I think this is the form: https://www.nta.go.jp/taxes/tetsuzuki/s ... 025_01.pdf The split box is relatively new, and not just this past year (2019). Previous versions only asked for 12/31 values.

And I think I may have been mis-remembering about indicating both of the totals, tho from the dating on the right, this link may not be the most recent version.

I think I've only ever used ticker symbols to identify a given fund/stock, and use "MMF" for the cash fund (with both basis and present value showing the same numbers.

As an aside, I've mimicked this form in excel, and fill that out, print, and submit--far better than handwriting it all. Redoing it looked like a headache when they added those split boxes, and I had one of our kids (an excel whiz) re-do that part of it for me. I hope they don't change anything else! The NTA should present these in fillable PDFs, like most US tax forms.

Also, memory seems to tell me that there is an accompanying form (summary?) that is a quick fill out (totals only?) that I get a stamped copy of to show that it was submitted.

[TokyoWart]

...

there was a split box for each item where value was listed--as both the current value, and cost basis.

I have never seen this before - I have never needed to disclose the cost basis for any of the assets I disclose, only their value on 12/31. I wonder if this is your accountant's practice?

I think this is the form: https://www.nta.go.jp/taxes/tetsuzuki/s ... 025_01.pdf The split box is relatively new, and not just this past year (2019). Previous versions only asked for 12/31 values.

And I think I may have been mis-remembering about indicating both of the totals, tho from the dating on the right, this link may not be the most recent version.

I think I've only ever used ticker symbols to identify a given fund/stock, and use "MMF" for the cash fund (with both basis and present value showing the same numbers.

As an aside, I've mimicked this form in excel, and fill that out, print, and submit--far better than handwriting it all. Redoing it looked like a headache when they added those split boxes, and I had one of our kids (an excel whiz) re-do that part of it for me. I hope they don't change anything else! The NTA should present these in fillable PDFs, like most US tax forms.

Also, memory seems to tell me that there is an accompanying form (summary?) that is a quick fill out (totals only?) that I get a stamped copy of to show that it was submitted.

Interesting. I just checked my version of that form (I'll call is "FA5102" after the number in the upper right) and in each case the upper half of the box is blank while the lower has the total as of December 31. The same is the case for the similar "FA6103" which lists Japanese assets.

[captainspoke]

Another detail: On that form, for acquisition price I use my cost in US$ and convert to yen via TTM on the specific acquisition date--and only use the year-end rate for present value.

I actually keep a file noting the yen cost of acquisition for a few things--to avoid surprises. Something bought at 75-80/$ can be kind of ouchy when selling it at 104, given that there may be a gain in $, too. (Or helpful if I need to cancel out a loss.)

[eyeswideshut]

Interesting. I just checked my version of that form (I'll call is "FA5102" after the number in the upper right) and in each case the upper half of the box is blank while the lower has the total as of December 31. The same is the case for the similar "FA6103" which lists Japanese assets.

Yup, this is exactly the same for mine.

[Tanuki]

I've researched this topic recently. Here is what I found, I hope it helps

This is quite old, but it's explained in plain English, and I believe the content hasn't changed that much :
https://www2.deloitte.com/content/dam/D ... rement.pdf

General introduction to the topic :
https://www.nta.go.jp/publication/pamph ... irashi.pdf
FAQs :
https://www.nta.go.jp/publication/pamph ... ai_faq.pdf

I highly recommend that you ask your accountant to do all the work.

[dcon]

...

there was a split box for each item where value was listed--as both the current value, and cost basis.

I have never seen this before - I have never needed to disclose the cost basis for any of the assets I disclose, only their value on 12/31. I wonder if this is your accountant's practice?

I think this is the form: https://www.nta.go.jp/taxes/tetsuzuki/s ... 025_01.pdf The split box is relatively new, and not just this past year (2019). Previous versions only asked for 12/31 values.

And I think I may have been mis-remembering about indicating both of the totals, tho from the dating on the right, this link may not be the most recent version.

I think I've only ever used ticker symbols to identify a given fund/stock, and use "MMF" for the cash fund (with both basis and present value showing the same numbers.

As an aside, I've mimicked this form in excel, and fill that out, print, and submit--far better than handwriting it all. Redoing it looked like a headache when they added those split boxes, and I had one of our kids (an excel whiz) re-do that part of it for me. I hope they don't change anything else! The NTA should present these in fillable PDFs, like most US tax forms.

Also, memory seems to tell me that there is an accompanying form (summary?) that is a quick fill out (totals only?) that I get a stamped copy of to show that it was submitted.

I know this is an old thread, but I was questioning whether I was handling my MMF correctly on the FA5102. On FA5102 what 国外財産の区分 (Classification of foreign property) do you specify for the MMF? 非上場株式 Unlisted stocks? My MMF is a US Vanguard Fund so I have been using Unlisted stock. I also have been using the same value for both basis and present value.

FYI: they always have both a fillable and non-fillable PDF version of FA5102 on the NTA site, but no fillable version of FA5003. The Reiwa version is here:

https://www.nta.go.jp/taxes/tetsuzuki/s ... 809_03.pdf