Foreign Brokerage Accounts: What US Expats Must Report

US expats who hold investment accounts at foreign brokerages — stocks, bonds, ETFs, or mutual funds — face the full range of US reporting requirements for those accounts and the income they generate. The account itself must be reported on FBAR if aggregate foreign account balances exceed $10,000 and on Form 8938 above its higher thresholds. Dividends and interest earned in the account are reportable as income on Schedule B, and capital gains from sales are reported on Schedule D. Foreign ETFs and mutual funds held in the account are likely PFICs, requiring annual Form 8621 filing for each PFIC held. US-domiciled stocks held in a foreign brokerage are not PFICs — the key question is the domicile of the fund or investment, not the brokerage. For this reason, many expats find it simpler to keep investments in a US brokerage account, accessing the same global markets through US-domiciled ETFs without the PFIC complications.