# Form 8938



## spyg (Nov 20, 2016)

Please don't judge me, this one is pretty stupid.

When completing my US taxes, I used the yearly average exchange rate to convert U.K. rental income and interest into US dollars, as per the instructions. However, I also used the same yearly average exchange rate to convert data for form 8938 as I wanted to keep it consistent. However, it now looks like I should have used the exchange rate from 31st December for that year for form 8938.

Here is the dilemma; I am submitting my FBAR late for the same year and I think I have three options;

1. Complete FBAR with same yearly average exchange rates in order to keep everything consistent. This will mean going against the instructions on the FBAR to use the 31st December exchange rate.
2. Submit a 1040X with an adjusted form 8938 using the correct 31st December exchange rate and then use the same exchange rate for the FBAR.
3. Leave form 8938 as is and use the correct 31st December exchange rate for the FBAR. This will mean that the dollar amounts will be different on the FBAR and form 8938.

Any advise would be gratefully received.

Thanks.


----------



## Bevdeforges (Nov 16, 2007)

I wouldn't worry about which exchange rate you used. Yes, they say to use the average rate or the year-end rate, but it is also perfectly acceptable to use other rates, and most people do.

The difference in dollars isn't going to be all that much and chances are they won't compare the actual balances you give them between your forms anyhow. (FBAR asks for the "high balance" vs. other forms that require actual transaction amounts or the year-end balance.) Add to that, the FATCA reporting required from the banks these days gives them a difference balance anyhow at who-knows-what exchange rate.

If any question should arise, you should be able to tell them where you got the exchange rate you used - but other than that, I wouldn't worry about it.
Cheers,
Bev


----------



## spyg (Nov 20, 2016)

Thanks Bev, really appreciate the response.

That was exactly what I thought initially. I used a published IRS rate for form 8938, which is consistent with the other data in my tax return. Therefore, I think that it's a defendable position to take.

I also didn't think they would ever be organized enough to compare the FBAR and form 8938. Not because they are incompetent but because there are so many of the forms.

I started worrying just because I am being very cautious and want to ensure my returns are totally accurate.

Thanks again.


----------

