FAQs: Liabilities




In answering the questions below, we have assumed that the liability at issue exceeded $10,000 at some point time during the reporting period.  Otherwise, the liability would not be reportable.

1. Do I have to report a mortgage on my vacation home?

A mortgage on your vacation home is treated like a mortgage on your primary home. Follow the guidance for mortgages that is provided on the main “Liabilities” page.

2. Do I have to report a revolving home equity line of credit if my personal residence serves as collateral for the loan?

An exercised line of credit secured by your personal residence is treated like a mortgage.  Follow the guidance for mortgages that is provided on the main “Liabilities” page.  You do not need to report a line of credit that has not been exercised.

3. Do I have to report a loan against my IRA or retirement plan?

No.

4. Do I have to report a loan against the cash value of my life insurance policy?

No.

5. Do I have to report loans taken out by a business I own?

You do not have to report the liabilities of a business, unless you, your spouse, or a dependent child is personally liable (i.e., do not include a loan owed by a LLC, unless you, your spouse, or a dependent child is also personally liable for that same loan).

6. What if I have paid off a liability?

You still report the liability.  If you wish, you may indicate that you have paid off the liability in your description of the liability in the “Type” column, but you are not required to indicate that you have paid off the liability.

The reporting rules for revolving charge accounts, such as credit card balances, are different from all other liabilities.  You do not have to report credit card debt if you paid off the debt before the close of the reporting period.  For a Nominee, New Entrant or Candidate report, the reporting period ends on the date on which you file the report.

7. Do I have to report personal loans from relatives?

It depends.  The relevant statutory provision is somewhat complicated.  You do not need to report personal liabilities that (a) you, your spouse, or your dependent child owe (b) to a spouse, child, parent, or sibling of (c) you, your spouse, or your dependent child.

Personal loans from other relatives are reportable.  However, if you received the loan from a relative or a family trust, you may write “family member” or “family trust” in the “Creditor Name” column.

8. Do I have to report a personal loan from a close friend?

Yes, personal loans from friends are generally reportable.

9. Do I have to report a loan on which I co-signed?

If you are only a guarantor on a loan, such as a car loan for your child, and you have no present legal obligation to repay that loan, then you do not have to report the loan as a liability.  However, if by co-signing the loan you have created a current legal obligation to repay regardless of whether the person with whom you co-signed defaults on the loan, then report the loan.

10. Do I have to report any additional information for a current debt stemming from a co-signed loan?

Yes.  Identify the co-signer in the “Type” column.  If the party is a relative, identify the party as a “family member” (e.g., “co-signed loan for family member”).  Otherwise, provide the party’s name (e.g., “co-signed loan for Wilson Widgets”).

11. Do I have to report a debt that I dispute I owe?

You should consult with your ethics official in order to determine whether or not the disputed debt is reportable.

12. Do I have to report taxes I owe?

You never have to report taxes that you owe for the current year.  However, you generally need to report overdue taxes.

13. Do I have to report a tax liability that is being enforced through a lien that has been placed on my personal residence?

Yes.  A tax lien is significantly different from a mortgage so the reporting exception for a mortgage on a personal residence does not apply.

14. Where can I find the interest rate on my margin account?

This information should be available in your margin agreement.

15. Do I have to list the securities purchased through a margin account?

You do not need to list the securities in Part 8.

However, you would report in Part 6 securities that have a value of more than $1,000 or from which more than $200 was received during the Part 6 reporting period.

16. Do I have to report all capital commitments?

Usually, yes.  You have to report capital commitments that you would be legally required to meet upon demand.

17. Do I have to report a bill for services, such as legal fees or university tuition?

Report a bill for services only if it was overdue and exceeded $10,000 during the reporting period.  If the bill was not overdue, you do not need to report it.  Note that a bill paid on installments would be reported as an ordinary loan/liability, regardless of whether any particular installment payment was overdue.